Grand China Shipping said Monday that it will temporarily suspend its SPX service due to “unfavorable market conditions.”
It is the latest of a group of carriers operating in the transpacific with small ships, that have ended service this year in the face of plunging freight rates and high fuel costs.
Just last week Horizon Lines said it was suspending its transpacific service offered in conjunction with a service between the West Coast and Guam. It noted that the Shanghai Container Freight Index indicated that rates from Shanghai to the West Coast have fallen 37 percent since Oct. 2010, from $2,400 per 40-foot container to $1,500.
“The rising bunker costs as well as the weakening economic conditions lead us to believe that we are facing more challenges than any quick and sustainable trade recovery,” Grand China said in a notice posted on its Web site. “Despite the deteriorating market volumes in the Pacific trade over the past months, we have endeavored to run our existing service without interruption, however, with no end in sight to the rate and volume pressures in this trade we have made this difficult decision to suspend the service temporarily.”
It promised that the process of suspending the service “will be managed very carefully to ensure an orderly transition which is least disruptive to your supply chain moves.”
Grand China said its final sailing from China to the U.S. West Coast will be with the ship Cape Madrid, voyage 1107E, departing Yantian on Nov. 5th , Xiamen on Nov. 7th, Ningbo on Nov. 9th and Shanghai on Nov. 10th,. It said cargo booked and loaded for this vessel will be delivered to the final destination in North America without disruption.
The company asked empty containers not used for above vessel Cape Madrid voyage 1107E to be returned to its container depots in Yantian, Xiamen, Ningbo and Shanghai.
The company said the final westbound voyage will also be on the Cape Madrid ,voyage 1107W, sailing Long Beach on Nov. 25th, arriving Yantian on Dec. 10th, Xiamen on Dec. 11th, Ningbo on Dec. 13th and Shanghai on Dec. 14th, 2011. It said the vessel is expected to sail on schedule and cargo will be delivered in China without interruption.
Grand China, which is listed as having the 32nd largest containership fleet in the world by the information service Alphaliner, said its it was temporarily suspending operations in the transpacific and “will be focusing on our core trade lanes such as the China / Japan and Southeast Asia trades as well as our domestic markets. Our company remains financially sound and we continue to provide reliable services in all these markets.”
In addition to Grand China and Horizon, other carriers that have withdrawn transpacific service this year include:
- Matson ended one of its two China strings in August, while retaining another that also calls in Hawaii on its westbound leg.
- The Containership Co. folded its transpacific service in April.
- CSAV in June suspended its ASIAM service connecting the Indian Subcontinent and Far East with the U.S. West Coast.
- The New World Alliance in July withdrew its PSW service operated by Hyundai Merchant Marine.
- Hainan PO Shipping and TS Lines pulled one of their three jointly operated transpacific services in July, just months after introducing it.
- Also in July, Maersk Line, Mediterranean Shipping Co., and CMA CGM decided to postpone the introduction until 2012 of a service with an identical rotation as the Hainan-TS Lines TP1 service.
- The CLX, jointly operated by COSCO/Hanjin/Wan Hai Lines and Pacific International Lines, ceased last month.
- CKYH or Green Alliance with Wan Hai Lines dropped their SJX service two weeks ago.