Thursday, March 30, 2023
HomeAnalysisCross-alliance cooperation on the increase as market weakens

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Cross-alliance cooperation on the increase as market weakens

Ocean carriers are pulling capacity from Chinese export routes and redeploying the ships to more robust tradelanes with growth potential.

Moreover, the weakness in the Chinese market is prompting more discussions on carrier slot swap agreements between rival alliances.

“Poor cargo demand in China and falling ocean spot freight rates have led to significant changes in global fleet deployment,” said Alphaliner.

The consultant said according to its data, more than 565,000 teu of capacity was withdrawn from Asia-North America and Asia-Europe trades last year.

It noted the biggest tonnage shift in terms of capacity was to Middle East and India-related services, which saw a boost of 320,600 teu, or 11% of fleet capacity, added last year.

The highest percentage increase was seen on the transatlantic, which recorded a 16.2% increase in capacity with the addition of 162,300 slots, as the market remained resilient despite the demand downturns seen elsewhere.

Carriers do not expect the Chinese export market to recover anytime soon, and Japanese carrier ONE said yesterday, in its results outlook, that profitability was “expected to deteriorate”, due to a softening of demand.

It said the number of blanked sailings was “expected to increase due to the longer slack season around the Chinese New Year and the time it takes for cargo volumes to recover”.

ONE is now forecasting a net profit of $940m for the current quarter, compared with the $5bn+ profit it achieved in the same period of 2022, reflecting the sharp reversal in demand for cargo from China and consequent slump in freight rates.

It follows that carriers will look to optimise their fleets by deploying ships on more lucrative trades and make more extensive use of slot charters on the Asia-Europe and transpacific routes to cover their contract commitments.

And, with demand from China likely to stay weak, perhaps until the peak season, cross-alliance slot chartering could become increasingly common.

“Topping up the ship with a slot charter, even if it’s from another alliance, makes sense,” one carrier contact told The Loadstar. “It means more revenue in the voyage result, and that outranks any commercial concerns.”

Indeed, this month THE Alliance lead line Hapag-Lloyd commences a slot charter with Ocean Alliance lead line CMA CGM on the French carrier’s FAL3 loop from Asia to North Europe. This, it said, would “strengthen its coverage” and provide dedicated connections to North European ports.

At the same time, Hapag-Lloyd will terminate its standalone CGX China-Germany Express service, which it launched at the height of the demand boom.

Elsewhere, Alphaliner reports that CMA CGM and ONE have a filed an amendment to their transpacific slot exchange agreement to swap slots between the CMA CGM-operated Pearl River Express service and the Asia-US west coast leg of THE Alliance’s FP1 pendulum loop, which is operated by ONE.

The consultant noted that the latest slot charter agreement took the cross-alliance cooperation between the two carriers on the transpacific to six loops.

Source: theloadstar.com

Related Posts

Video

Finance & Economy
Shipping News
Ports

TORM announces secondary public offering of Class A common shares

TORM announced the commencement of a secondary public offering of 5,000,000 of the Company’s Class A common shares by OCM Njord Holdings S.à r.l.,...

Lomar Appoints Marius Bujor As Technical Director

Lomar Shipping, the shipping subsidiary of the Libra Group, has announced the appointment of Marius Bujor as its new Technical Director. Based in the...

EXMAR Reports Improved 2022 Results

During its meeting of 28 March 2023, the Board of Directors of EXMAR reviewed the results for the year ending 31 December 2022. HIGHLIGHTS 2022 ·...

Carnival Corp Posts Smaller-Than-Expected Quarterly Loss

Cruise operator Carnival Corp on Monday reported a smaller-than-expected quarterly loss and beat estimates for revenue, helped by resilient demand for leisure travel, higher...

Eva Birgitte Bisgaard steps down as chief commercial officer at Maersk Tankers

Eva Birgitte Bisgaard is stepping down from her role as chief commercial officer at Maersk Tankers. Christian M. Ingerslev, chief executive officer of Maersk Tankers,...

Wartsila sees role for ethanol in fragmented bunker fuel landscape

Wartsila is seeing a potential role for ethanol in the shipping industry’s multi-fuel future,...

Baltic index ticks up on firm demand for larger vessels

The Baltic Exchange’s main sea freight index edged up on Wednesday on higher rates...

Baltic index drops to a near 3-week low on lower vessel demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index falls on lower vessel demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Global Goods Trade Softening from 2022’s Record Level

International commerce soared to a record of $32 trillion in 2022, but goods trade...

APM Terminals to double capacity in Rotterdam port

APM Terminals, a subsidiary of Danish shipping company Maersk MAERSKb.CO, plans to double its capacity at Rotterdam Port, a spokesperson for the company said...

APM Terminals announces strategic partnership in Vietnam

APM Terminals engages in a strategic partnership with Vietnamese HATECO group for a project to develop two new deep-water berths at Lach Huyen port...

Russia-Bound Containers Stuck At Antwerp Port For Over A Year

Five Russia-bound containers from India’s Jindal Stainless Ltd (JSL) JIST.NS have been stuck at the Belgian port of Antwerp for around a year, unable...

Drewry: Port Throughput Index Down 4.5% Year-on-Year

The Drewry Container Port Throughput Indices are a series of calendar adjusted volume growth/decline indices based on monthly throughput data for a sample of...

Port of Los Angeles moves 487,846 container units in February

The Port of Los Angeles processed 487,846 Twenty-Foot Equivalent Units (TEUs) in February, a 43% decrease from the previous February’s all-time record. “February declines were...