Maersk drops string, raises rates on transatlantic
Maersk Line announced Tuesday it will discontinue one of its transatlantic services and implement a series of rate hikes in the trade next year.
Specifically, Maersk will discontinue its Trans-Atlantic 3 (TA3) service between North America and Northern Europe 'in an effort to adjust capacity to better suit market demand.'
'Trading and market conditions on the transatlantic route warrant elimination of excess capacity between Europe and North America,' said Soren Castbak, Maersk's senior director of Atlantic services, in a statement. 'We monitor the dynamics of the marketplace closely to ensure our product network is efficient and matches the demands of the trade. Although we believe we have seen the bottom, these capacity reductions are necessary due to the lower demand caused by the economic downturn.'
Subject to regulatory filing, the TA3 service will be discontinued in mid-December 2009, reducing by one third the capacity offered by Maersk, CMA-CGM, and the New World Alliance. Maersk said it would continue a partnership and space exchange with the New World Alliance and continue to charter slots to CMA CGM. New World Alliance members include APL, Mitsui OSK Line, and Hyundai Merchant Marine.
The TA3 is half of a 12-vessel pendulum string that Maersk operates between Asia, the Americas and Europe. The transpacific portion of the service is designated by Maersk as its TP7 service. The ships have an average capacity of 4,933 TEUs, according to ComPair Data. Maersk said the TP7 “will no longer be operated as the pendulum service that it currently is today” but had no other detail immediately. Regarding vessel sizes or layups, it said “these details are yet to be finalized.” A company spokesman added that “our preferred routing for US West Coast cargo to Europe continues to be intermodal transit through Houston onto the TA2. This service will continue uninterrupted.”
Maersk said it will continue to offer service to ports called in the TA3, with alterations to the TA1 and TA2 services. Although with the end of the TA3, Maersk will discontinue service to Halifax.
The TA1 service, which is operated by the New World Alliance, offers 12 ships with an average capacity of 4,724 TEUs each. MOL and APL contribute six ships each. The APX/TA1 is the transatlantic leg of an Asia/America/Europe pendulum service.
Maersk said changes to the TA1 service will include the addition of an eastbound call at Antwerp, Belgium and also Le Havre, France. The carrier said the new rotation on the transatlantic will be Miami, Jacksonville, Savannah, Charleston, Newark, Antwerp, Bremerhaven, Felixstowe, Rotterdam, Le Havre, Newark, Norfolk, Charleston, Los Angeles, and Oakland.
The TA2 service, (which the New World Alliance members call the ATS) will now use six instead of five, U.S.-flag ships operated by Maersk
Line Ltd. It will offer new port calls at Miami on the eastbound rotation and Newark, Savannah, and Miami on the westbound. The new rotation will be Miami, Houston, Mobile, Norfolk, Rotterdam, Felixstowe, Bremerhaven, Newark, Charleston, Savannah, and Miami. After the service changes, New World Alliance member MOL will no longer charter slots on this service, though APL and Hyundai will continue to do so.
Meanwhile, Maersk said it will increase rates next year on the transatlantic trades, including cargo moving between North America and North Europe, and North America and the Mediterranean. The increases will apply to cargo moving both East and West.
It said “trading conditions for the carriers operating in these markets are still subject to unacceptable rate levels and the situation is unsustainable in the longer term. Announcing these increases in advance will allow customers to plan their shipments with a full understanding of the expected rate levels required to sustain these vital transatlantic trades.”
Maersk said it plans to increase rates three times next year, although the timing will be slightly different for the North Europe and Mediterranean trades.
The increases are $400 for 20-foot containers and $500 for 40-foot boxes for each of the first two increases. They become effective in January and April for the North Europe trades and in April and July for the Mediterranean trade. The carrier also said increases are planned for both trades in October, but the amount is yet to be announced.
Maersk added 'upcoming rate levels are subject to further revision based on dynamic market conditions; however final rate levels will be announced 30 days prior to the effective date.' ' Chris Dupin