Big Carriers Reduce North-South Options

Drewry Maritime Research
Monday, January 13, 2014
Source: Drewry Maritime Research

Maritime research company, Drewry, said in this week’s container insight report that it is not just on the East-West routes that big container lines are consolidating, but consortia have also been expanding in North-South tradelanes, thereby reducing the number of weekly services available to shippers.

Hapag-Lloyd’s recent reduction in the number of weekly services offered to customers between Northern Europe and the East Coast of South America through slot charters is just another step towards carrier and joint service consolidation in the North-South trades. It is not just niche-market players who have been struggling on the routes, although they have clearly felt most of the pain so far (see Table 1), implying that greater structural changes lie ahead.

Whatever form these changes take, including the possible extension of East-West alliances, shippers will already be concerned by the dramatic decrease in services offered by ocean carriers. Over the past five years, the number of separate strings offered between Europe and ECSA alone fell from 13 to eight (including two fortnightly con-ro services offered by Grimaldi Lines). In the interim, only Costa/Maruba fell by the wayside, so the rest were lost through consortia expansion.

Tables 2 and 3 shows the omnipresent way that consortia have spread their tentacles between Europe and ECSA since 01 July 2008, with Maersk, MSC and CMA CGM separately ending up with 72% of all vessel capacity on 1 November 2013, and Hamburg Sud another 4%, although much of this is offered to other lines through slot charters. Hapag-Lloyd’s arrangement with MSC’s ECSA service is no longer one of these, however.

In the tradelane between Asia and ECSA, the corresponding reduction in services was from 10 to six, but Maersk, MSC, CMA CGM and Hamburg Sud have independently only ended up with 48% of all vessel capacity.

The consolidation process has been spurred on by the cascading of much bigger ships no longer required in East-West trades due to weak cargo growth in 2012 and 2013, which will not last forever.

The danger of such declines in shipper choice is highlighted in UNCTAD’s latest Review of Maritime Transport 2013, including East-West trades, which states: “Based on UNCTAD’s Liner Shipping Connectivity Index (LSCI), the average number of carriers per country has decreased by 27% over the past decade, from 22 in 2004 to 16 in early 2013. This reduction in choice among shippers poses challenges, especially for smaller developing countries, which are confronted with potentially oligopolistic markets”.

In Drewry’s view, most of this consolidation took place in North-South tradelanes, where many niche market players have either folded or been taken over (see Table 1).

According to Drewry, the significance of the service rationalization that has been taking place in the North-south trades is that whilst regulatory authorities are considering whether or not the P3 and G6 alliance extension should be allowed in the East-West trades, shippers have already been confronted with many partner lines sharing vessels to similar extents – but without major protest so far.

drewry.co.uk
 

  • Source: Drewry Maritime Research

    Source: Drewry Maritime Research

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Container Ships

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

Liebherr to Deliver RTGs to Mayotte and Manila

Liebherr confirms orders for variable speed RTGs and electric RTGs. DPWorld Asian Terminals Inc. has placed an order with Liebherr Container Cranes for a further 5 RTGs at its Manila facility.

UASC Targets Expansion to Beat Container Market Blues

UASC expects to reach volume of 2.35 mln TEU in 2014 Global carriers still struggling with weak conditions United Arab Shipping Company (UASC) is on a major expansion drive,

News

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

USCG to Ensure Safety During World Series

The Coast Guard and local agencies are working to ensure the safety of boaters and baseball fans during World Series games at AT&T Park this weekend. The

Areva-Siemens Raises Claim Over Finnish Reactor Delays

The French-German consortium Areva-Siemens , the supplier of Finland's much-delayed Olkiluoto-3 nuclear reactor, has increased its claim against Finnish utility Teollisuuden Voima (TVO),

Logistics

UN: Ship Inspections near Somalia for Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

Singapore Bunker Meter Mandate Targets 'Frothy Fuel'

Singapore, the world's biggest bunkering port, plans to end the so-called "cappucino effect" in ship fuelling through new meters designed to stop suppliers from short-changing customers,

Antwerp Port Achieves Highest Throughput

The port of Antwerp handled a freight volume of 148,344,168 tonnes during the first nine months of this year. That’s 3.7% more than the same period last year. Both

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Pod Propulsion Salvage Ship Electronics Ship Repair Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1903 sec (5 req/sec)