Maersk move no impact on M’sia
Move to remove excess capacity won’t affect reliability
Maersk Line expects its recent mover to remove a substantial capacity from the Asia-Europe trade lanes to not have any impact on its Malaysian shipping services.
PETALING JAYA: Maersk Line, the global market leader for container shipping, expects its recent move to remove a substantial capacity from the Asia-Europe (AE) trade lanes to not have any impact on its Malaysian shipping services.
Maersk Line managing director for Malaysia, Singapore and Brunei Bjarne Foldager told StarBiz that there would be no impact to Maersk Line’s flagship Daily Maersk product and it would continue to deliver absolute reliability with Daily Maersk transportation time promise from Tanjung Pelepas of 26 days.
“Our customers tell us that with Daily Maersk they are able to make substantial savings in their supply chain, among other things, by reducing buffer stock and operating just in time.
“Customer shipping from other parts of Malaysia can also enjoy the superior reliability by using the extensive feeder network connecting to Tanjung Pelepas.
“We will also continue to have our dedicated feeder services from Port Klang Northport, Penang, Kuantan and East Malaysia ports.” he said.
It was recently reported by Bloomberg that A.P. Moeller-Maersk A/S, would remove 19 ships from Asia-Europe trade lanes in a bid to bolster rates as demand slumped.
Bloomberg said Maersk would permanently scrap the AE5 service, which employed eight vessels, and halt the AE9 operations, which has 11 vessels, until early December,
Foldager said further to the 9% capacity reductions it had made earlier this year, this recent decision would bring the total capacity reduction on Maersk Line’s Asia-Europe network to 21% this year.
On the rationale for the move, Foldager explained that he expected a 3% slump on the Asia-Europe container trades this year and they were taking steps to adjust to this without reducing its market position. “Total
Customer shipping from other parts of Malaysia can also enjoy the superior reliability by using the extensive feeder network connecting to Tanjung Pelepas.
— BJARNE FOLDAGER
trade volume has declined and the outlook for the economies of Europe and Asia remains weak.”
He added that at this juncture, it would be too early to comment on their intentions of the ships (that would be taken off).
“Our focus now is to reshuffle the service network to strike a balance between supply and demand.
“And where commercially appropriate, Maersk Line will consider additional opportunities to reduce capacity and look for slow-steaming opportunities.
“Maersk Line will continue to provide customers with a broad and competitive range of services on this trade,” he said.
The Asia-Europe trade lane is one of the most important shipping lanes that connects the East and the West. But, since the global economic crisis in late 2008, the trade lane has been sailing in stormy weather in terms of freight rates and demand. This is further compounded by a slew of excess capacity that flooded the market as a result of earlier orders stemming from previous bull run of the sector prior to 2008.
Closer to home, the country’s biggest shipping company, MISC Bhd, had earlier restructured its liner business in January 2010 when it got out of the Far East-Europe trade services to re-focus on an intra-Asian model.
It then decided to cease its liner operations late last year due to competitive and saturated operating conditions as capacity had overflowed even into the intra-Asia trade.
On the outlook, Foldager said the European Union and US trade volumes continued to stagnate below the pre-crisis level that preceded the 2008 peak. The overall picture for the outlook for the shipping industry remained challenging for the rest of the year.
“But, we would like to maintain market share through sustainable rates by offering value-added service to our customers. This respect, we will continue to be responsible and adjust our capacity to match the demand and thereby maintain our market share,” he said.