Seasonal service reductions beginning in transpacific

Seasonal service reductions beginning in transpacific The discussion agreement among container carriers in the eastbound transpacific trade forecasts seasonal service reductions will be deeper than last year, and some carriers are carrying them out earlier than they did in 2007.
   Meanwhile, two carrier groups — the New World Alliance of APL, MOL and Hyundai, and the joint service of Wan Hai Lines and Pacific International Lines — said Wednesday they would reduce capacity by the end of October.
   The Transpacific Stabilization Agreement said its 15 members will reduce cumulative capacity by 4.5 percent in the fourth quarter versus the third quarter that ended Sept. 30. It also expects capacity in the transpacific will be cut by another 2.4 percent in the normally slow first quarter of 2009.
   It also noted that fourth quarter 2008 capacity is forecast to be 2 percent less than it was in fourth quarter of 2007.
   Looking forward to 2009, TSA said capacity forecast for the first quarter of 2009 would be 3.5 percent higher than the same 2008 period. Growth is expected to taper off with capacity up 0.9 percent year over year in the second quarter of 2009, and third quarter capacity up 0.2 percent from the third quarter of 2008.
   TSA’s forecast comes on the heels of the New World Alliance’s decision to combine two of its 14 services on the transpacific.
   Spokesmen for APL and MOL said the PS3 and PSW services will be combined into a single loop known as the PCX. The PS3 had used four 3,000-TEU ships and the PSW five 5,500-TEU ships.
   The New PCX service will have a double call in southern California with the rotation of Ningbo, Shanghai, Kwangyang, Busan, Long Beach, Los Angeles, Oakland, Busan Kwangyang and Ningbo.
   MOL will take one of the ships being displaced from the PS3 service and add it to its Japan-Los Angeles (JAS) service and call at a full range of West Coast ports instead of returning to Asia after a single call in Los Angeles. The new rotation on the JAS service will be Osaka, Kobe, Nagoya, Shimizu, Tokyo, Los Angeles, Oakland, Tacoma, Vancouver, Tokyo and Osaka.
   Meanwhile Wan Hai Lines and Pacific International Lines said they would reduce capacity on their existing China transpacific service to meet market requirement by deploying five 2,500 TEU vessels to replace the five 4,250-TEU vessels currently being operated. The change will begin in the last week of October 2008.
   The current port rotation will be maintained: Xiamen, Hong Kong, Yantian, Kaohsiung, Long Beach, Oakland and Xiamen.
   The TSA noted its forecast was based on an internal survey of TSA lines and their individual actions in the market. The group stressed that TSA has no role as a group in setting or determining Asia/U.S. capacity. And it noted the forecasts could change as market conditions warrant.
   It said the growth numbers would be further reduced by several factors:
   ' Increased vessel sharing among carriers.
   ' Consolidating routes and service strings.
   ' Slow-steaming of vessels to conserve fuel.
   ' Vessel charter terms allowed to expire.
   ' Layups for maintenance and repair. ' Chris Dupin