The P3 is an alliance between the three largest shipping lines (Maersk, MSC & CMA CGM). Subject to regulatory approval it is due to start in May 2014 covering East-West trades. The
Alliance announced its new service schedules last week. In the tradelane from Asia to Northern Europe, where no sailings were omitted in August, six were cancelled in September and another 11 in October. This means that vessel capacity was reduced by approximately 1.3% in September, followed by 1.4% in October.
While this enabled load factors to be maintained above 90%, it did not prevent a slide in rates as carriers have continued in a price war for market share. A similar pattern of skipped sailings was seen on the Asia-Mediterranean trade. A further 11 void sailings are planned on the Asia-Europe trade in November, which will result in the removal of 12% capacity on the trade. Similarly, on the Asia-Mediterranean trade six sailing cancellations have been announced, representing around 10% of capacity on the sector.
The trend means that shippers need to pay more attention to forward planning over the next six months, rather than assume that a contracted carrier will usually have a vessel offering the right port pairs on the right berth at the right time. Ocean carriers have got used to temporarily
regulating vessel capacity supply to match uncertain demand over the past 12 months. So the requirement for more vigilance over schedules is not new; only its importance is escalating.
The timing of cancelled sailings will likely continue to be planned around GRI’s, thereby ensuring that the filling up of surrounding vessels encourages shippers to pay up or shut up should roll-overs occur. When sailings are seriously omitted, freight rates usually jump up, although there are exceptions due to freight rate levels sometimes being dependent on other factors than vessel utilisation.
In Drewry’s view, ocean carriers will cancel sailings instead of withdrawing whole services on Asia-Europe/Med trades during the northern hemisphere’s winter season. This is expected to continue up until the introduction of the P3s new services in May 2014 (subject to regulatory sanction) and the onset of peak season.