December 09, 2014: Over the last decade, the operating environment on the Transpacific has been challenging, with the overall trade delivering unprofitable results for nine of the last ten years leading some to question the long-term health of the trade.
As a result, we have taken a detailed look at the economics of the trade with a focus on ensuring we secure our position.
Today we announce that we are reducing our capacity to the Pacific Southwest. In doing so, we will be closing our current TP5 service as of January 15th, 2015; and cease offering our direct Taiwan Express product to the Pacific Southwest as of January 1st, 2015.
This by no means suggests our commitment to the Transpacific trade has wavered. In fact, we see it very much the opposite. As we look toward the future, we want to continue playing a critical role in the supply chain of our customers on the trade.
However, the long-standing downward pressure on profitability in the Transpacific represents a serious risk to service levels. We will not take the lead but rely on the Transpacific Stabilization Agreement to address the profitability challenge to the benefit of all stakeholders.
To ensure we provide the necessary coverage for our customers, all key corridors will continue to be serviced by alternate options.
For the customers who are using our current TP5 service today, North China and Korea markets will be covered by our new East-West network, launching this January, which will provide the finest products in the market with best-in-class transit times. For the Japan market, effective from January 16th, 2015, we will launch a new TP5 product with reduced capacity covering Busan, Yokohama, Los Angeles, and Oakland.
Maersk has also announced it will begin a new weekly direct service with 10 x 3.500 TEU vessels from Jebel Ali, Mundra and Nheva Sheva to South and West Africa from 24th January 2015. The rotation will be: Jebel Ali, Mundra, Jawarharlal Nehru (JHT), Durban, Luanda, Apapa, Tincan, Cotonou, Port Elizabeth, Durban, Port Louis, Jebel Ali.
Within Africa, Maersk will operate a new direct product from Durban to Luanda, Apapa, Tincan and Cotonou; Cape Town into Luanda, and Cotonou via transshipment in Durban. Cape Town into Lagos remains on our FEW1 direct service