Maersk cuts a U.S. flag service in the Pacific

But the carrier will continue to servce customers by chartering space from APL.

   Maersk Line will terminate a string of ships in the Pacific that uses U.S. flag vessels, and it will instead charter space on U.S.-flag APL ships in order to serve customers who need to move cargo on vessels that are flagged in the U.S. and employ U.S. mariners.
   The TP5 string had connected the ports of Los Angeles, Oakland and Dutch Harbor Alaska with ports in Japan, Korea and Qingdao, China.
   Four of the six ships in the service had been U.S. flag vessels, with the other two registered overseas.
   Instead, Maersk Line said it will charter space from APL’s CC3 service in order to offer U.S.-flag service to shippers who need it. Five of the ships in the CC3 service are registered in the U.S.
   “As of Jan. 15, 2015, Maersk is terminating its TP5 U.S. Flag service. Over the last decade, the operating environment on the Transpacific has been challenging and, as a result, we have taken a detailed look at the economics of the trade with a focus on ensuring that we secure our position in this trade for the years ahead,” the company said in a customer notice. Maersk said it remained committed to the trade, and effective Jan. 1, it will enter into a slot purchase agreement with APL for U.S. Flag space covering transportation among the Busan, Yokohama, Los Angeles and Oakland markets.
   Meanwhile, APL said it will charter space on a Maersk Line service that operates between the U.S. and Canadian ports on the East Coast, the Mediterranean and Persian Gulf. APL will charter space on Maersk Line’s MECL-1 service. That will give APL, which currently operates the AZX between ports in the Mediterranean, the Persian Gulf and Singapore and Thailand additional U.S. flag capacity.
   APL will benefit by being able to offer U.S. flag shippers sailing off the East Coast additional choices, and the transpacific service will benefit from having Maersk as a regular slot charterer.
   Maersk Line Limited has not announced plans for the four U.S.-flag ships in the TP5 service — the Sea-Land Charger, Sea-Land Lightning Intrepid and Sea-Land Comet.
   U.S. Maritime Administrator Paul Jaenichen said, “The nation’s maritime shipping industry continues to face pressure to remain competitive in the global marketplace and the Maritime Administration remains concerned about loss of vessels to the U.S. fleet and its direct impact on U.S. mariner jobs. This is a new announcement, and we must wait to see what any impacts may be, but Maersk vessels currently participating in the Maritime Security Program remain part of the program.”
   Steven E. Werse, secretary-treasurer of the Masters, Mates and Pilots union, said that he also understood that the four Maersk Line ships would continue to participate in the MSP program and that his union members would not see a loss of jobs.