Maersk Line is warning of a possible rate war in the Asia-Pacific trade.
Vincent Clerc, Maersk Line’s chief trade and marketing officer, said that “following the Chinese (Lunar) New Year, volumes in container shipping have not picked up as per expectations. The fact that lower prices cannot be used as a lever to increase volumes, coupled with data that suggests continued weakness in the market, means there is only one viable option for companies that are seeking to weather the current storm: adjust costs including by withdrawing capacity.
"In order to do this Maersk Line has taken capacity out on the Asia-Europe 9 route. This is the second time in 12 months that Maersk Line has made a major effort to act responsibly in order to keep the Asia Europe trade in balance," he explained.
“Some other lines have chosen to respond to lower demand levels by
lowering prices. Such a move risks resulting in a fully-fledged price
war: a development that concerns us. It places Maersk Line in the
invidious position of having to choose between acting responsibly and
protecting our market position," he warned. "Whilst continuing to work to adjust
costs, there is no doubt that Maersk Line is also determined to defend
its market share at any cost.”
This month Maersk combined its AE9 service with its TP7 service. Formerly the TP7 service between Asia and the U.S. East Coast had used the Panama Canal. Maersk has rerouted its TP7 service through the Suez Canal, combining the volumes with those from the AE9 so Asian and U.S. cargo is loaded on the same ships. The Europe cargo is discharged in the Mediterranean and the ships then proceed to Savannah, Charleston and Miami, before returning to the Mediterranean, Suez Canal, and East Asia. - Chris Dupin