ZIM-2M tying Asia-U.S. East Coast loops

Maersk Line, MSC and ZIM will cooperate on five services.

ZIM-2M tying Asia-U.S. East Coast loops

Maersk Line, MSC and ZIM will cooperate on five services.

ZIM-2M tying Asia-U.S. East Coast loops

Maersk Line, MSC and ZIM will cooperate on five services.

 
ZIM Integrated Shipping Services and the members of the 2M Alliance, Maersk Line and Mediterranean Shipping Company (MSC), announced Thursday that they will cooperate on the Asia-U.S. East Coast trade.
    Starting in early September, the parties will together operate five loops between Asia and the U.S. East Coast. ZIM will operate one loop and 2M will operate four loops, and the parties will swap slots on all loops.
    Currently ZIM has two services from Asia to the U.S. East Coast, one that transits the Panama Canal and the other that transits the Suez Canal. The 2M currently has four services between the two regions.
    According to Bluewater Reporting, Zim currently operates 22 ships with 11,793 TEU of allocated capacity between Asia and the U.S. East Coast or about 8.9 percent of the market. Bluewater says the 2M Alliance with 30,239 TEU of allocated capacity on 44 ships has about 22.7 percent share of the market; the Ocean Alliance with 53,256 TEU of weekly allocated capacity on 70 ships has about a 40 percent share; and THE Alliance with 37,892 TEU of weekly allocated capacity on 52 ships has about a 28.5 percent share.
    The agreement will significantly improve ZIM’s services between Asia and the U.S. East Coast, said Eli Glickman, president and chief executive officer of ZIM by increasing frequency of service, faster transit times and offering shippers a wider selection of ports. In addition, it is expected to generate cost efficiencies for ZIM because of the economy of scale of using larger ships and sharing space.
   “We will improve our combined product portfolio between Asia and the U.S. East Coast and deliver on our promise to customers while creating the needed operational efficiencies for us to run a sustainable business on the trade also in the future,” said Søren Toft, chief operating officer for Maersk Line.
    MSC said the new arrangements will improve its “products across these regions and unveil new opportunities for shippers. Southeast Asian exporters will benefit from a new direct service between Laem Chabang port, Thailand, and USEC ports as far as New York. The revised network will include calls at Colombo to facilitate shipping opportunities for cargo from nearby India, Pakistan and Bangladesh.”
    Glickman said ZIM will continue to operate the ZCP-ZIM Container Service Pacific string and either return to charterers or redeploy ships in its Suez service.
    While ZIM is a relatively small carrier, with a 2 percent share of global container trade, it punches above its weight in the Asia-U.S. East Coast trade.
    Glickman said that the company has about an 8 percent market share in the Asia-U.S. East Coast trade and about a 10 percent share in the ports of New York and Savannah.
   “We are a big player on this trade, and as such, the biggest companies in the world give us the opportunity to be an equal partner on this trade,” said Glickman.
    He said ZIM will keep the same number of slots, but they will be spread across five instead of two strings.
    ZIM said it will “continue to be independent, building on our personal links with our customers, for which we are so well known in addition to our ongoing technological initiatives such as our successful blockchain project.”
    Glickman said ZIM’s overall strategy of being what he calls a “global niche carrier” remains the same. The company is open to discussion of cooperation with other carriers, but he said the company is not going to decide in advance, but identify the pluses and minuses of cooperation as opportunities present themselves.
    ZIM’s financial performance, as measured by its EBIT (earnings before interest and taxes), has been better than average for several years, said Glickman, including that of many large carriers.
   He did not provide a specific forecast for the second quarter, but noted ZIM had about a $20 million loss in the first quarter and since then that the industry has seen a combination of rising fuel prices, higher ship charter costs and freight rates that have not increased much.   
    The cooperation is scheduled to begin in early September, subject to all needed regulatory approvals. The term of the cooperation is seven years. The parties expect to disclose more information about network changes and schedules on the trade as soon as possible.
    While ZIM and MSC provided names for the services, Maersk has not yet announced what it will call each string. The following details were provided by ZIM and MSC, although ZIM noted some minor changes in rotation may take place prior to the services starting up.
    The names given to the five services by ZIM and MSC, their rotations and the size of the vessels deployed as provided by MSC on the five services are as follows:
    • ZCP — ZIM Container Service Pacific/Amberjack: Xingang - Qingdao - Shanghai - Ningbo - Busan - Kingston - Savannah - Charleston - Jacksonville - Wilmington -Kingston - Busan – Xingang. Deployed vessel size will be 8,500 TEUs.
    • ZBA — ZIM Big Apple/Empire: Yantian - Xiamen - Ningbo - Shanghai - Busan - Newark - Baltimore-Norfolk - Newark - Salalah - Colombo - Singapore - Yantian. Deployed vessel size will be 11,500 TEUs.
    • Z7S — ZIM Seven Stars/America: Chiwan - Hong Kong - Yantian - Vung Tao - Singapore - Newark - Charleston - Savannah - Miami - Freeport - Singapore - Chiwan. Deployed vessel size will be 9,500 TEUs.
    • ZSA — ZIM Sunny Atlantic Express/Emerald: Xiamen - Kaoshiung - Yantian - Shanghai - Busan - Christobal - Savannah - Norfolk - Charleston - Miami - Singapore - Xiamen. Deployed vessel size will be 9,500 TEUs.
    • ZNF — ZIM New Frontier/Elephant: Laem Chabang - Singapore - Colombo - Salalah - Newark - Norfolk - Savannah - Freeport - Singapore - Laem Chabang. Deployed vessel size will be 6,500 TEUs.
   The Seven Stars/America and New Frontier/Elephant services will use the Suez Canal, while the Zim Container Service Pacific/Amberjack and Sunny Atlantic Express/Emerald services will use the Panama Canal. The Zim Big Apple/Empire service has an eastbound round-the-world routing, traveling through both canals.
Truckers need more safe places to park, not more studies that do nothing to increase or preserve capacity. This is a critical highway safety issue that deserves dedicated federal funding.
Seventeen container vessel operators deploy capacity on the Asia-to-North America trade, while only 10 deploy capacity on the Asia-to- North Europe trade, according to data from BlueWater Reporting’s Carrier Trade Route Deployment Report.
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ZIM-2M tying Asia-U.S. East Coast loops

Maersk Line, MSC and ZIM will cooperate on five services.

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ZIM-2M tying Asia-U.S. East Coast loops

Maersk Line, MSC and ZIM will cooperate on five services.

By Chris Dupin on Jul 19, 2018AmericanShipper.com