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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter February 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

News

Nordana Sea Delivered to Symphony Shipping

After successful sea trials, M.V. Nordana Sea was delivered to Symphony Shipping on February 11, 2016. Constructed by builder Ferus-Smit in the Netherlands (yard number 419),

NATO Ships Arrive in Batumi

This morning, four NATO ships assigned to Standing NATO Mine Counter-Measures Group TWO (SNMCMG2) arrived in Batumi, Georgia for a scheduled visit in an effort

US Oil Drillers Cut Rigs to Least in 6 Years

U.S. energy firms this week cut oil rigs for an eighth week in a row to the lowest levels since January 2010, data showed on Friday, as energy firms continue to

Logistics

Baltic Index Rises for First Time in 2016

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose for the first time this year on Friday, helped by higher rates for panamax vessels.

Philippines Mulls Bilateral Sea Talks with China

The Philippines may consider two-way talks with China to resolve a territorial dispute in the South China Sea but only if it wins its case with Beijing at an arbitration tribunal in The Hague,

Adani Ports Income Up by 15%

Adani Ports and Special Economic Zone Limited (“APSEZ”), India’s largest port developer and part of Adani Group, today announced the financial results for the quarter

 
 
Maritime Security Navigation Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Sonar Winch
rss | archive | history | articles | privacy | 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: 0.1185 sec (8 req/sec)