Maersk Line, the container shipping unit in the A.P. Moller-Maersk group in Copenhagen, says it will cut about 16% of its capacity on the West Central Asia-Europe trade lane.
“In our continuous effort to provide our customers with an attractive and competitive West Central Asia/Europe network – both in terms of capacity and coverage – Maersk Line is enhancing the ME1, ME2 and ME3 services, and discontinuing the ME5 service with effect from October 2015,” the company said in a statement.
“The closure of the ME5 will result in a capacity reduction corresponding to approximately 16% of our dedicated West Central Asia-Europe service capacity,” it added.
The company noted that termination of the service will not impact its ability to serve its customers in the market that the ME5 covers. “We are adding new port calls to the ME1, ME2, and ME3 services and, at the same time, launching a dedicated feeder shuttle between Chennai, Colombo and Salalah to ensure a world-class product between West Central Asia and Europe,” Maersk Line said.
Related news: Maersk Lines expects stronger Asia-Europe trade in 2H15
The move comes after Nils Smedegaard Andersen, APM group chief executive officer, had said in a conference call on 13 August, “We look at our capacity all the time, but we did not expect Asia-Europe volumes to decline one year ago when we planned our capacity; we overestimated growth.”
APM also lowered the global growth forecast for container trades on the same day by saying, “Global demand for seaborne container transportation is revised to an expected increase by 2-4% versus previously by 3-5%.”
“Global container demand is expected to have grown between 1% to 2% in the second quarter of 2015 (2Q15) compared to 2Q14. The soft market development was primarily due to weak imports into Europe,” APM said.
“This is a slow growth market,” Andersen commented on the figures at the time, adding that this fact was more important than the downward revision of the volume forecast itself.