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More lines cutting capacity to halt rates dive

More lines cutting capacity to halt rates dive

   Quite a few seafarers are in line for an extended winter break as more carriers attempt to arrest falling freight rates on under-performing trades by cutting capacity in the 'slack season.'

   Maersk Line is the latest to announce a capacity cutback by suspending its weekly Asia/West Coast South America LACAS service.

   'The slack season capacity program is being implemented to ensure the right balance between supply and demand in line with requirements,' Maersk said in a statement.

   LACAS uses nine ships averaging about 3,000 TEUs and calls Hong Kong; Shekou; Ningbo; Shanghai; Kwangyang; Ensenada, Mexico; Buenaventura, Colombia; Callao, Peru; San Antonio, Chile; Lirquen, Chile; Balboa, Panama; Yokohama; and back to Hong Kong.

   The 'Maersk Nottingham' will make the final voyage on LACAS when it departs Lirquen on Nov. 28.

   Maersk said that LACAS will be replaced by a relay service via its hub port in Balboa. West Coast South America shipments from Balboa to South China for feeder connection will be carried by its AC2 and TP3 services.

   In the same struggling trade, Chilean carrier CCNI and Germany's Hamburg Sud are expected to drop capacity on their joint Asia Express loop by some 25 percent from November through March, and have announced a $300-per-TEU general rate increase for eastbound cargoes, effective Dec. 1.

   On a wider scope, New World Alliance members APL, Hyundai Merchant Marine and Mitsui O.S.K. Lines said Tuesday that from November through April, they will suspend about 4,000 TEUs of capacity per week and adjust services across the alliance's network to meet decreased trade demand anticipated during the annual slack shipping season.

   Prior to the latest announcements, Grand Alliance carriers Hapag-Lloyd, NYK and OOCL said two weeks ago that from Nov. 20, they would reduce combined capacity in the transpacific market by about 3,000 TEUs per week.

   Capacity reductions are also expected in the transatlantic with CSAV Norasia and Maersk both stopping services in that trade at the turn of the year.

   In a related matter, Germany's Senator Lines said today it has started its 'Concept 2007' strategy that will see it reduce its cargo offering by 240,000 TEUs a year by ending its participation on six loss-making Asia/Europe services.

   Senator Lines does not operate any ships in the Asia/Europe trade, but instead takes slots on the services of the CKYH Alliance carriers COSCO Container Lines, 'K' Line, Yang Ming and its parent company Hanjin Shipping.

   From January, Senator Lines will participate on 12 liner services covering North Europe, the Mediterranean, Asia, Middle East, Canada and South America, instead of the 18 as it does now.

   More than half of Senator Lines' reduction will come from the ending of Hanjin's U.S. West Coast/Asia/Europe PDS pendulum service, which is being restricted to a transpacific-only loop by the end of the year.