The Grand Alliance and Zim will cut capacity on the transpacific lane to the U.S. East Coast from early October by merging two existing loops they jointly operate.
The carriers will merge their SCE and SCE2 loops into one service from Oct. 8, with the combined loop to have a rotation of Busan, Xiamen, Kaohsiung, Shekou, Yantian, Hong Kong, Manzanillo (Panama), Kingston, New York, Norfolk, Charleston, Savannah, Kingston, Manzanillo (Panama), and Busan.
The existing SCE loop has a rotation of Kaohsiung, Shekou, Hong Kong Balboa, New York/New Jersey, Norfolk, Savannah, Miami, Manzanillo (Panama), and Kaohsiung. It’s operated with nine vessels (four each from Hapag-Lloyd and OOCL, and one from Zim) with an average capacity of 4,492 TEUs, according to American Shipper
affiliate ComPair Data
The existing SCE2 loop is jointly operated by Zim, the Grand Alliance, and Hyundai Merchant Marine. It has a rotation of Busan, Shanghai, Xiamen, Shekou, Hong Kong, Yantian, Manzanillo (Panama), Kingston, Savannah, Charleston, Kingston, Manzanillo (Panama), and Busan. The SCE2 is operated with nine vessels (five from Zim, and two each from NYK Line and Hyundai) with an average capacity of 4,871 TEUs.
The Grand Alliance – whose members are Hapag-Lloyd, NYK, and OOCL – said that the “service arrangement will continue through the winter until further notice.” The carriers have not yet released details about ship deployment on the merged loop.
The two existing Grand Alliance/Zim services account for nearly 8 percent of capacity from Asia to the U.S. East Coast, according to ComPair Data’s BlueWater Reporting service. Depending on the size of the vessels to be deployed on the merged service, combining the SCE loops could remove up to 4 percent of capacity on the trade.
The timing of the service withdrawal is also notable. Winter rationalization programs from transpacific carriers have typically commenced in mid-November to account for slackening demand after peak season. The early withdrawal of a service suggests carriers might not expect a flourish of cargo during peak season this year.
The withdrawal also comes one week after the deadline for contract negotiations for union longshoremen on the U.S. East Coast. The possibility of a strike has created some operational uncertainty for carriers. An American Shipper
poll of carriers last week found that 14 of 25 were uncertain how a strike would affect their sailings to the U.S. East Coast. Six carriers said they would not divert any sailings, while five said they would divert some portion of their calls.
Meanwhile, the Grand Alliance will also skip one sailing of its CCX transpacific service in October to coincide with China’s Golden Week holidays. The Oct. 10 sailing of the service, which has a rotation of Qingdao, Ningbo, Shanghai, Busan, Los Angeles, Oakland, Busan, and Qingdao.
The carriers will add a call at Qingdao to the Oct. 12 sailing of their SSX service to help account for the skipped sailing. - Eric Johnson