2M Cut Service on Trans-Pacific

by | Jun 29, 2018

2M partners – Maersk and MSC – have announced they will be suspending their Eagle service indefinitely from next week, in addition to rationalising port rotations on three other services.

The decision to cut the service – on the Trans-Pacific trade – is in response to overcapacity, port delays in North Asia disrupting their schedules, and higher fuel prices preventing faster speeds. In the past carriers could increase their vessel speed to make up time lost in their journeys, but with rising fuel costs this is now costing them thousands of dollars more per voyage.

A number of carriers have responded to the rapidly-escalating costs by introducing emergency bunker fuel surcharges of around $50-60 per TEU on non-contract business. 

There is increasing concern that the overcapacity issues are set to continue – or perhaps deteriorate further – as the Trump administration continues to trade duty increases with China.

Due to overcapacity, increased costs are being absorbed by the steamship lines as the market will not support increased freight rates. In the short term this obviously benefits importers and exporters but in the longer term the carriers will have to react to market conditions.

The unsettled environment in the trade right now is expected to result in more carriers adjusting their port rotations, or even cutting services completely, to balance the over supply in relation to the demand. 

 

UniOcean Lines operate the most comprehensive schedule in the market, including our Trans Pacific, Northern Europe, Australasia and Inter Asian services.

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