Industry analyst Alphaliner suggests container carriers need to trim four services to balance supply and demand in the trade lane between Asia and Europe.
CMA CGM Group is adjusting its services between Asia and Europe to better match demand, the ocean carrier said in a statement.
It’s the latest example of a container carrier seeking to address overcapacity in a trade that has seen freight rates drop to record lows.
The French carrier said it “will implement a blank sailing program for June 2015 on its Far East – North Europe lines, in order to adjust capacities in line with the demand, without service disruption. Connections and space on backup carrier are secured and transit times guaranteed.” Further details of the blank sailing program and how it will affect service offerings can be found here.
CMA CGM announced separately it will make changes to its FAL1 and FAL3 services later this month.
Starting June 24, CMA CGM will reorganize the port rotation of its FAL1 service, which employs the carrier’s largest ships, saying this will improve port coverage in North China.
According to ocean carrier schedule and capacity database BlueWater Reporting, CMA CGM deploys 11 vessels with an average capacity of 14,521 TEUs on the FAL1. The loop has a full rotation of Tianjin, Dalian, Pusan, Ningbo, Shanghai, Yantian, Port Klang, Algeciras, Southampton, Dunkirk, Hamburg, Rotterdam, Zeebrugge, Le Havre, Malta, Khor Fakkan, Yantian, and Tianjin. Fellow Ocean3 Alliance members UASC and CSCL also participate on the service, along with Evergreen Line, FESCO, Hanjin, and CMA CGM subsidiaries ANL, Delmas and US Lines.
Starting June 29, and for a duration of 12 weeks, CMA CGM’s FAL3 service will be operated alternately with its FAL2 service. UASC and CSCL deploy 11 vessels with an average capacity of 13,860 TEUs on the FAL2, according to BlueWater Reporting.
In order to be harmonized with the FAL2 rotation, the rotation of the FAL3, which deploys 11 vessels with an average capacity of 11,293 TEUs, will be modified. The port rotation of the FAL3 will be Ningbo, Shanghai, Xiamen, Chiwan, Yantian, Port Klang, Le Havre, Rotterdam, Hamburg, Antwerp, Le Havre, Jeddah, Port Klang, and Ningbo. UASC, CSCL, Evergreen Line, FESCO, ANL, Delmas and US Lines all also share space on the loop.
Last Friday, the Shanghai Shipping Exchange reported the spot rate from Shanghai to North Europe was just $243 per TEU.
Carriers have announced ambitious general rate increases for July 1 of $900 to $1,200 per TEU, according to Alphaliner.
In its June 10 newsletter, Alphaliner reported that in the first six month of this year, voyage cancellations have reached an all time high of 10 percent, but “the widespread practice of void sailing has proven ineffective so far” in halting the slide in rates.
According to its calculations, removal of at least four Far East to North Europe strings “is required to address the current supply-demand imbalance on the trade.”
CMA CGM adjusts Asia-Europe services
