FILE PHOTO: Shipping containers are transported on a Maersk Line vessel through the Suez Canal in Ismailia, Egypt July 7, 2021. REUTERS/Amr Abdallah Dalsh/File Photo

Maersk Suspends Aisa-U.S. East Coast Loop

The Loadstar
Total Views: 5580
September 29, 2022

By Mike Wackett (The Loadstar) –

Maersk has suspended an Asia-US east coast loop, confirming that transpacific ocean carriers are seeing a reduction in bookings to North American ports on both the Pacific and Atlantic coasts.

The carrier announced the last sailing of its TP28 pendulum service would be performed by the 4,447 teu Merkur Archipelago from Vung Tau, Vietnam, on 13 October.

Thereafter, the loop will be merged into Maersk’s TP20 pendulum service, with a revised rotation of: Jakarta-Vung Tau-Shanghai-Ningbo-Busan-Panama Canal-Mobile-Newark, returning to Jakarta via the Suez Canal. The first sailing will be the 4,658 teu Maersk Kentucky on 16 October.

“We remain committed to carrying all cargo contracted to Maersk and or awarded through the Maersk Spot and Twill channels,” said the carrier. “As soon as cargo demand recovers, we will bring capacity back.”

The termination follows the suspensions of the 2M’s TP3/Sequoia loop, Matson’s CCX service, CU Lines’ TPX and unconfirmed reports that CMA CGM was halting its Golden Gate Bridge service.

Up to this point, demand for US east coast services has remained strong, fanned by the shift from congested west coast ports and nervousness about the lack of a new west coast labour agreement, the previous one having expired on 1 July.

According to Blue Alpha Capital founder John McCown’s analysis of the top 10 US ports, August container imports for US east and Gulf coast ports increased year on year by 12%, to 1,187,095 teu, while volume for west coast ports declined 11.5% in the month, to 978,844 teu.

Moreover, August saw New York & New Jersey officially overtake Los Angeles as the nation’s biggest container port, after a 10.5% increase in volumes, compared with the year before, to 441,511 teu, while LA saw a decline of 16.8%, to 404,513 teu.

Mr McCown’s report notes that US port congestion has also shifted, with the cargo, to the east coast, with a monthly average of some 110 ships at anchor on the Atlantic side, compared with around 20 in the west. Savannah had the highest average, of 37, with New York at 25 and Houston 24.

Nevertheless, despite the congestion, freight rates for the east coast all-water services have been tumbling in the past weeks, albeit not as fast as for US west coast destinations, and have declined by around 65%, compared with 12 months ago, to under $7,000 per 40ft – although they are still 50% higher than the pre-pandemic rate.

However, clearly Maersk has found that operating two 4,500 teu panamax vessels on proforma 77-day round-trips, plus waiting time, is becoming uneconomic, particularly with the scarcity of higher-paying contract shipments, which need to be supplemented with spot cargo to fill ships.

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