Maersk Line has announced a temporary cease in bookings for the eastbound trade from North Europe to Asia.
In its Weekly Highlights
newsletter the company said "as a result of a large number of consecutive vessel cancellations following Chinese New Year, a significant cargo backlog has been created in North Europe."
"This has reached an unprecedented level unfortunately necessitating a complete booking stop, effective immediately, in order to prevent further escalation of the backlog."
The company emphasized "the booking stop is only for North Europe-Asia eastbound."
Maersk said "the booking stop is temporary and we are working to clear it as soon as possible so that we can resume booking acceptance as usual. Based on the current situation, an early estimate is for the backlog to be cleared by early May."
In a statement that elaborated on the announcement, Maersk said "very low westbound demand from Asia after the Chinese New Year prompted several carriers to cancel multiple westbound sailings and, in turn, eastbound sailings."
"Stronger demand eastbound has been experienced in past months and demand has continued to rise despite general rate increases for February, March and April," Maersk added. "We have heard from customers that other lines have also stopped bookings until May."
Maersk told shippers it is "implementing this complete booking stop to ensure we prioritize and deliver on the bookings we have already accepted. By implementing this booking stop, we take action to resolve the situation at the soonest possible, and also hope this will allow you to make alternative arrangements for your cargo flows to minimize impact to your supply chain."
The carrier noted "shippers are obviously disappointed by the temporary capacity shortage, but it’s too early to evaluate the impact on supply chains."
It said it was "working on all options, including adding extra ports on an inducement basis, reviewing possible extra loader opportunities out of North Europe and other measures to reduce the impact and duration of the booking stop."
Maersk said "at the moment, terminal density at some ports is nearing yard capacity. If bookings are not halted, this could negatively impact productivity, further slow down carriers’ ability to clear the heavy backlog/overflow and impact other trades."
"I find it a very strange announcement," said Ben Hackett of Hackett Associates, a shipping analyst who produces the Global Port Tracker reports for both the United States and Europe. "Only about 5 percent of capacity has been withdrawn.
"In theory they are running their Daily Maersk service, so it should not be a problem," he added.
On Feb. 17, Maersk said oversupply of container vessels operating on the Asia–Europe trade lane had pushed its container freight rates to unsustainably low levels.
Hackett said "the last time I saw or heard something like this was in 2009," when carriers were negotiating new freight rates and "they had withdrawn so much capacity that all of a sudden they proclaimed there was a shortage of capacity" in the Europe-Asia and transpacific services.
Hackett said he believed "they are using it to bump the freight rates up, trying to make a point."
Citing figures from Container Trade Statistics, he said that in the fourth quarter of 2012, export container volumes from Europe to the Far East were about 1.7 million TEU, half the 3.4 million TEU carried from the Far East to Europe.
"It is hard to understand. Even if you take out 5 percent or 10 percent capacity how you end up with a lack of capacity," said Hackett. "I think it is more an unwillingness to carry cargo at certain rates." — Chris Dupin