Maersk, CMA CGM plan joint Asia/North America services
CMA CGM and Maersk Line are preparing a major shake-up in their services between Asia and North America, launching two new vessel sharing agreements starting in May 2009.
“These changes are made in anticipation of a more difficult trading environment in 2009 and a part of our efforts to further rationalize deployment,' Maersk said. 'These changes result in an 8 percent net reduction of capacity for Maersk Line between the Far East and North America. These adjustments are consistent with our efforts to improve the product offering while also reducing costs and environmental impact through increased efficiencies and economies of scale.”
CMA CGM said the deal would allow it to operate its own vessels instead of chartering space in a trans-Suez service, and also enable it to operate bigger ships on a trans-Panama service.
One service, which CMA CGM has dubbed the Hudson Loop and Maersk the TP10, will be a trans-Panama service linking Asia with U.S. East Coast ports.
The other, which CMA CGM is calling the Columbus Loop, and Maersk the TP3, will be a pendulum/trans-Suez service with vessels linking Asia with North American ports on the East and West coasts. Maersk will fold its TP9 service into this service as well.
As the new services start up, CMA CGM plans to withdraw from two existing services — a trans-Panama service it operates in cooperation with China Shipping and a New World Alliance trans-Suez service on which it charters space.
Jean Philippe Thenoz, group vice president of North America lines for CMA CGM, noted his firm has been working with Maersk and Mediterranean Shipping Co. since earlier this year on two loops between Asia and the United States — what Maersk calls the Yangzee and Bohai Rim services.
“So we have the experience of cooperating with Maersk on the U.S. trades and it has been a smooth cooperation,” he said. “And it gives us the desire to go further, to the U.S. East Coast with them. And it is a way for them and us to rationalize service and decrease system costs as well, because these will use modern, bigger tonnage.”
Maersk said the new vessel sharing agreement “follows almost a year of successful cooperation,” and called it “a further rightsizing of capacity in the transpacific trade.”
“Our customers have been looking for products offering alternative gateways from Asia directly to the East Coast via all water routing — and this new vessel sharing agreement represents this option, as well as a new direction for our companies. Our partnership has been tested in the transpacific and we are pleased with the new and dynamic product offering for our customers,” said Bill Woodhour, sales manager for North America for Maersk Line.
'Both carriers are inventive and can react fast, sharing a common family-controlled European based perspective on the container industry, and facing similar problems worldwide at the present time,' said Francis Phillips, an industry analyst with American Shipper's ComPair Data affiliate. 'However, CMA CGM lacks Maersk’s broad diversification in other shipping sectors and in energy outside the liner trades.'
For CMA CGM, the Hudson Loop-TP10 will replace the trans-Panama PAX 1 service that CMA CGM and China Shipping operate today. That service utilizes 4,000-TEU ships, whereas the new Hudson Loop/TP10 service will use larger ships, with four ships contributed each by CMA CGM and Maersk. Thenoz said China Shipping did not have larger ships available for the service.
While the two lines use different formulas for gauging vessel size, the vessels deployed in the service will be roughly 4,300 to 5,100 TEUs.
Port rotation on the transpacific Hudson Loop will be Ningbo, Shanghai, Qingdao, Pusan, Balboa, Panama, Savannah, New York, Miami, Panama, Balboa and Ningbo.
Maersk said the Balboa calls “will further provide a diverse product to South American and Central American customers.” This service will commence with its first sailing on May 9 out of Asia.
The Columbus Loop-TP3-TP9 pendulum service will use 13 6,500-TEU ships, with CMA CGM contributing six vessels and Maersk providing seven vessels.
CMA CGM said it wanted to withdraw from the New World Alliance trans-Suez service where it was only a space charterer on other carrier’s vessels.
“In a major east-west trade like Asia North America, being the third-largest carrier in the world, it does not make sense for us to be a slot buyer,” Thenoz said. “Our desire and our target is to be a vessel operator in all the major east-west trades and this is one of the reasons for which we went with another partnership.”
Thenoz noted the CMA CGM ships will be newbuildings, being delivered by the Sundong Shipyard in Korea. He noted that they are specially designed to be low enough to pass beneath New York's Bayonne Bridge.
He said his company was hopeful that an investment would be made to replace or improve the Bayonne Bridge so that larger ships would be able to call New York. “Ultimately there will be stage where there will need to put 8,000-TEU ships into the U.S. in years to come — I’m not saying in 2009 or 2010 or 2011 — it may be further out. But there is logic that there should be some 8,000-TEU ships coming to New York, especially in 2014 when the Panama Canal will be enlarged.”
In the meantime, he said using 6,500-TEU ships was a way to test whether U.S. East Coast terminals can efficiently discharge and load post-Panamax vessels. On the West Coast, Maersk said it will fold its TP9 service into the new pendulum service, but eliminate calls to the Pacific Southwest.
The service “will continue to provide access to inland markets in North America through Seattle and Vancouver while avoiding potential congestion often faced in southern West Coast ports. The revised TP9 will offer access to multiple Asian markets with calls at Singapore, Hong Kong, Yantian, Shanghai and Busan with improved access to the Pacific Northwest,” Maersk said.
The service will commence with a first sailing on May 14, out of Asia with a rotation of Shanghai, Hong Kong, Yantian, Singapore, Suez, New York, Norfolk, Tangier, Suez, Singapore, Hong Kong, Yantian, Shanghai, Pusan, Seattle, Vancouver, Yokohama and Shanghai.
Thenoz noted the call in Tangier will allow U.S. exporters to reach customers in North and West Africa as well as minor Mediterranean ports because the port is well served by feeder lines. Both CMA CGM and Maersk are investors in the Tangier terminal.
Maersk said it is also making changes on two other transpacific services:
' The TP6 service rotation will be amended to include only Los Angeles on the U.S. West Coast.
' The TP7 has been adjusted for “improved overall transit times, a focus on southern Chinese ports, and an eastbound call at Yokohama, Japan added to more efficiently serve a wider market.”
' Speaking more generally about the outlook for the container shipping industry, Thenoz noted CMA CGM expected to weather the industry downturn well. He noted the company operates a fleet of about 400 ships, but about three-fourths are chartered and some charters expire next year. So he said the company can trim capacity by returning vessels to owners and not have to lay up ships.
And while east-west volumes “are not brilliant today,” Thenoz said the north-south trades “are fine. We are very strong to Latin America, Africa, the Middle East, Black Sea and these markets, which do not grow at the same rhythm.
“We have been growing year after year and we believe in our future. This is not the first time some markets are going down. We know containerization will stay because this is very much linked to economic globalization we are not worried, We are confident,” he said. ' Chris Dupin