Asia/Pacific News
Maersk Line: New Rate War Looms for Intra-Asia Liner Markets
Operators could face new rate wars in intra-Asia routes as the size of new container ships grows, Brian Noe Kristensen, head of Far East Asia liner operations for Maersk Line, told Lloyd's Loading List.
Kristensen said that while the largest new ships coming onto the market, including Maersk Line's own Triple E vessels, will be deployed on deepsea trades, it will cause a cascade of panamax vessels into the intra-Asia routes, particularly as the main ports in Southeast Asia can handle the panamax ships.
That could mean regional players reduce their rates so they can fill up the larger ships.
"There will be no rate war in big trades in the foreseeable future, but I do see them in emerging-Asia trades," Kristensen said.
"If a liner got 10 panamax vessels [cascaded out from main routes] and cannot redeliver them, it can give them to its intra-Asian guys.
"The costs are sunk, so they can just make the best use of them. Their main task would be to fill them."
Last year, intra-Asia trades grew by 8.1 percent, according to Clarksons, making it one of the few areas of significant growth for liners.
Maersk's intra-Asia subsidiary MCC Transport saw volumes rise by 19 percent and rates increase 6 percent last year, but Kristensen rates will be increasingly squeezed.
"It will still be a growth area for volumes, but not for rates," he said.
Maersk Line plans to launch its first full Asia-Europe service using only Triple-E class containerships by the middle of next year, once it receives enough of the 18,000 twenty foot equivalent unit (TEU) ships to handle the routes.
The company will begin taking delivery of the huge ships from Daewoo Shipbuilding & Marine Engineering in June and will receive all 20 that it has ordered by 2015.
Maersk Line has said the Triple-E ships will greatly reduce fuel consumption on the Asia-Europe routes.
