| Subject: PR News Service - Copy Week 18 - On The Vine |
PR NEWS SERVICE Week 18 WEEKLY NEWSROUND Copy Date Headline It has been a week dominated by news of new services. Indeed, it is difficult to recall a time in the most recent past that matches the activity of late April, early May in this sector. Incredibly, a dozen new services on the big East/West trades have been reported in these columns since the beginning of April, and in the last week, Maersk Sealand has confirmed it too, is joining the stampede with new services on the Asia/Med, Asia/USWC trades. In all, between April and the beginning of the third quarter, nearly 80 containerships in the 2,000/6,500 teu frame will start new services on these major trade lanes, and only 14 of them are expected to be newbuildings. For weeks now, shipping line executives have said there is a dearth of vessels on the open charter market, and as we have to presume these learned people know what they are talking about, it has to be assumed, in a non dearth-like environment our portfolio of new services would swell way beyond its existing level. But before we dive into the oblivion of “What if”, maybe a good time to ask, “What now”. My Business Bank manager told me today, the UK economy is definitely on the up, and like the rest of Europe, “We should all being feeling extremely happy”. We have to assume the rest of the world has the same idea, and global bank managers tell their global customers the same. The Far Eastern Freight Conference website carries a listing of surcharges and adjustment figures imposed or to be imposed by its 16 member lines this year. The latest is a massive US$400 per container heading East from Europe to Asia, and a US$200 per teu hike for containers moving out of Mediterranean on the same route to Asia. As one carrier executive said today, “If we do not make money this year, we may as well give up”. Strong words maybe, but said with confidence, because his company will make money this year, and so will every other line – even P&O Nedlloyd and APL! So having this potential to make money rather than lose it, we
have a collection of shipping lines frantic to cash in on the box
bonanza. A sort of uncontrollable excitement is emerging, almost
like supermarket panic buying before a holiday period when everyone
wants that last jar of coffee Like in the real world of course, shipping lines have to convince the onlookers they are not just a bunch of bargain hunters intent on grabbing two jars of coffee when one will be more than adequate. This week we reported Maersk Sealand intends to pile nine ships into the Asia/Middle East/ Med trade, and a further five into the transpacific. The latter, to be known as the TP8, will serve China, Japan and the US West coast. The TP8 will operate five vessels, each around 3,700 teu capacity. But in Copenhagen they do not call the TP8, a service that is bringing in extra capacity, well not initially anyway. You see, Maersk Sealand is clever, and I am not being paid to say that! TP8 is more a replacement string that frees up two other strings, the TP3 and TP7 which serve Asia, the USWC and ports further south like Balboa, to concentrate on the transhipment business potential over ports such as Balboa, to and from areas like South America. So you don’t really end up with more transpacific capacity, even though we are told both the TP3 and TP7 will continue to call on the USWC. Well that ’s Maersk Sealand’s argument. One point of increasing interest, is this dearth of containerships on the open market philosophy. Is there honestly a lack of ships out there to carry the cargoes, or is it because owners are holding on in attempt to drive the charter market rates upwards. If the latter, then it is certainly a timely game to play. K Line and Yangming launched their new Asia/Mediterranean Shuttle Service last week. The service will deploy six 2,000 teu ships. Those ships are all early 80-s built Yangming tonnage that were rendered obsolete from the Asia/Europe trade when the two lines first came together in the late 90s, and at 19 knots service speed, that is not surprising. For their new shuttle role, the ships were switched from intra-Asia trades, where they were replaced by smaller, faster newbuildings from Yangming. In this case we assume that it made financial sense to have these vessels re-deployed, which again questions that verbal advice given by shipping lines to their competitors some years back, that everyone should be scrapping old tonnage to stop the growing threat of overcapacity. Bet you’ re glad you didn’t take heed of that “advice”, K Line and Yangming.
ASIA/EUROPE inc MEDITERRANEAN *Maersk Sealand AE6 : Nine 4,000/4,300 teu vessels *China Shipping Container Line : Eight or nine 3,000/4,000 teu
vessels *CMA CGM : Seven 2,700 teu vessels to serve southeast Asia/Mediterranean *Grand Alliance : Plans to launch new eight ships service with
vessels *K Line/Yangming with MOL slot charter Mediterranean Shuttle Service
(AMS) : Six 2,000 teu vessels Total no. of ships : 39 ASIA/USEC inc CARIBBEAN *CMA-CGM and P&O Nedlloyd : PEX2 all water service via Panama
Canal *Evergreen, Lloyd Triestino and Zim Israel : AUX service *New World Alliance *Grand Alliance Total vessels : 25 ASIA/USWC *Maersk Sealand : TP8 service *Great Western SS : *CMA CGM and China Shipping Container Line (Jade Express) EUROPE/MIDDLE EAST/INDIAN SUB-CONTINENT *APL, MOL and China Shipping Container Line *Maersk Sealand and Safmarine
Interested to hear about the cost of extra port security, and the words of Richard Pearson, head of HPH Westport, who has put a ball park figure of US$10 per container on a “multi million dollar investment meant to make his ports, including Felixstowe, a better, safer place. Under an IMO resolution, ports have until next year to improve their security – something that must be applauded given the ever present threat of terrorism. The overall cost in ports like Felixstowe, could relate to around US$10 a container. Presumably Pearson means extra handling charges (not surcharges that’s a temporary measure) But there are questions here that really do beg answers. In the UK, the government is not prepared to financially back the port security initiative. Thus, ports like Felixstowe will have to make their own cash injections to make the port and its surrounds, more secure. That, so we are told includes every possibility. More security staff, better control over access to and from the port, whatever it takes, and it’s going to cost millions. In a nation like Britain, I just wonder why in the interest of national security, does a port, and eventually the shipping line and the shipper, have to foot the bill for this. Didn’t Bush and his Administration fork out billions to ensure ports could do exactly the same on the other side of the Pond. Steering clear of politics, Hapag-Lloyd has jumped on the 8,000 teu ship bandwagon. The company has ordered three vessels for delivery in 2006 from Hyundai. OOCL, who earlier said the last two of their eight new 7,700 teu vessels would be enlarged to 8,000 teu capacity, have now acknowledged all eight will be 8,000 teu. Seems an attraction to break the barrier from all directions right now. And finally, it’s official. Flemming Jacobs is in London. The man who found himself jobless in Singapore earlier in the year, is in town. He has been spotted, not down in Aldgate waiting outside the P&O Nedlloyd headquarters, but in deepest suburbia house hunting. Well, if it isn’t him, it’s his twin brother. That’s it. A May Day Holiday weekend approaching. We always have our vacation after the rest of the world – it’s better that way. Enjoy the reading, enjoy the weekend, and thank you as always for your following of our news through the week. |