Euro line down to $620 to $655? 2M major outage

MSC said it was taking steps to adjust capacity to accommodate slower trade demand from Asia to Northern Europe. Maersk added that its overall goal was to "provide predictability to our customers and ensure minimal disruption to their supply chain by providing alternative routes and coverage for affected vessels".

As an alternative for volume shippers, MSC said it could offer call-ons at other Northern European ports on the non-blank loop. Specifically, MSC and Maersk's Griffin/AE55 routes will be suspended during weeks 43, 45 and 48, Condor/AE7 routes will be suspended during Weeks 44 and 46, and Lion/AE6 routes will be suspended during weeks 47 and 49.

The massive air traffic plan implemented by shipping lines on the Asia-Northern Europe route during Golden Week proved ineffective in slowing the decline in freight rates, resulting in a drop of up to 50% in September.

In addition, Hapag-Lloyd, CMA CGM ships and other announced last week to significantly increase the FAK rate from November 1, but so far the impact has been minimal. In fact, Loadstar recently received an unsolicited offer from a Shenzhen freight forwarder for a 40-foot container from Shanghai to Felixstowe, Rotterdam and Hamburg between $620 and $655, valid from October 18 to November 18, purported to be carried by Maersk.

At the same time, new container ships are flooding the market at the worst possible time. Following the delivery of 180,000 TEUs in August, 200,000 TEUs in July and a record 30,000 TEUs in June, new capacity of around 190,000 TEUs was delivered last month.

And a fleet of mostly large container ships delivered from Asian shipyards will continue into next year, leading to a worsening disconnect between supply and demand. In fact, MSC alone has 1.5 million TEUs on order, followed by CMA CGM with 1.3 million TEUs on order for new vessels.

Geneva-based MSC currently has an operating fleet of 5.4 million TEUs, according to Alphaliner, and the gap with Maersk has widened to 1.3 million TEUs before taking into account new ship orders. MSC has taken delivery of two 24,000 TEU very large container ships (ULCV) this month, but Alphaliner noted that the latest delivery of 24,346TEU "MSC Micol" may be idled for three weeks until the 2M Lion/AE6 loop is phased in next month.

However, with the announcement of the 2M Winter Program today, the very large container ships (ULCV) may be moored for a longer period of time.