Grand Alliance to rationalise Asia Europe service network

04 Nov 2009

Source:PR News Service

COPY : 6367 DATE : 4.11.09

EXCLUSIVE

Grand Alliance to rationalise Asia/Europe service network

The Grand Alliance lines, Hapag-Lloyd, NYK and OOCL are to rationalise their Asia/Europe service network by cutting back from the existing four loops to three to address slack season demand, and the departure of MISC Bhd from the alliance

Rumours have been circulating the market for some time of capacity cuts by the lines, but sources in Asia have today confirmed the new three loop service set up

The same sources have denied that part of the rationalisation process will entail the suspension of the direct Japan/Europe loop known as the EU1 or Loop 1 service

There had been talk that the lines would drop the Japan service and tranship Japan cargo in ports such as Kaohsiung or Hong Kong, but this firmly denied

Part of the new look service set up will entail the deployment of 8,000/9,000 teu vessels on all three loops, meaning that the Japan service will operate with vessels some 20-25% larger than at present

However, with the deployment of three instead of four loops, the lines will have moved positively to address the their overall capacity issues and will have reduced capacity by some 17%, according to PR News Service ComPort data

Present Grand Alliance Asia/Europe capacity :

Loop 1 - average weekly 6,530 teu

Loop 2 - average weekly 6,750 teu

Loop 3 - average weekly 8,900 teu

Loop 4 - average weekly 8,600 teu

Total weekly capacity : 30,780 teu

Anticipated slack season capacity :

Loop A - average weekly 8,500 teu

Loop B - average weekly 8,500 teu

Loop C - average weekly 8,500 teu

Total weekly capacity : 25,500 teu

Total capacity reduction : 17%

Discussions are ongoing over terminal issues and according to sources, it is "far too early to confirm the outcome" and what ports will be served in the new service network

It will be recalled that the CKYH Alliance has recently initiated a similar level of capacity reduction for the Asia/Europe and Asia/Med trades