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American Shipper

GRAND ALLIANCE CARRIERS REVISE CAPACITY GROWTH ON ASIA/EUROPE TRADE

GRAND ALLIANCE CARRIERS REVISE CAPACITY GROWTH ON ASIA/EUROPE TRADE

   Citing continuing weak market conditions, Grand Alliance carriers Hapag-Lloyd, Malaysia International Shipping Corp., NYK, OOCL and P&O Nedlloyd have revised their plans to add capacity in the Asia/Europe trades and decided to lay up several vessels.

   The carrier said that, following Chinese New Year in early February, they will withdraw two out of eight ships presently deployed on each of the “Loop B” and “Loop C” Asia/northern Europe weekly services. One sailing in every four on both loops will be canceled. The alliance carriers will also postpone indefinitely their plans to introduce a seventh weekly loop on the Asia/Europe trades, which had been planned to commence in 2002.

   The four other existing Asia/northern Europe/Mediterranean services of the Grand Alliance will apparently remain unchanged.

   Vessels withdrawn as a result of this latest initiative will be laid up until demand increases to the point that they are needed again.

   “Taken together, these changes mean that in the trades between Asia and both North Europe and the Mediterranean, the Grand Alliance has cut back on the capacity that it intends to operate during 2002 by more than 15 percent, compared with what had originally been planned,” the carriers said in a joint statement.

   However, on a year-on-year basis, the alliance will, in fact, have the same capacity or a small marginal increase in capacity, said James Kirsop, deputy managing director of NYK (Europe).

   The Grand Alliance carriers expect only modest increases in demand for 2002.

   The alliance's revised capacity program will replace the previous program of “ad hoc” vessel withdrawals, which has been in operation since early October and will continue until it is replaced by the new program.

   The impact of the alliance's capacity measures on the overtonnaged Asia/Europe trade is unclear, as many carriers continue to deploy new larger containerships.

   The alliance carriers believe their measures will help match supply and demand more closely and reduce overall costs.

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