Demand is weak! MSC to suspend this route for 6 weeks

On August 30, MSC said it would suspend its independently operated Asia-Northern Europe Swan loop for six consecutive weeks from week 37 to week 42 as demand weakened.

At the same time, three voyages of the Asia-Mediterranean Dragon service (Asia-Mediterranean Dragon service) in the 39th, 40th and 41st weeks will be canceled consecutively.

Drewry recently predicted that in view of the continuous delivery of new vessel capacity and the weak peak season, ocean carriers may implement stricter suspension strategies to prevent further declines in freight rates, which may lead to temporary cancellation of voyages by shippers/BCOs.

Previously, MSC announced a rotation plan for the Swan schedule, which included an additional call at Felixstowe in northern Europe, but also canceled some Asian port rotations.

The voyage of the 36th week of the adjusted Swan service will still depart from Ningbo, China on September 7th by the 4931TEU "MSC Mirella".

Swan Loop was relaunched in June this year as a separate service from the 2M alliance. However, MSC has struggled to justify the extra capacity and has reduced the size of ships deployed from around 15,000 TEU to a maximum of 6,700 TEU.

"Weak cargo demand in July and August forced MSC to deploy smaller vessels and cancel voyages," said consultancy Alphaliner. MSC decided to cancel three consecutive voyages on its separate Asia-Mediterranean Dragon loop due to weak demand.

In fact, the latest Ningbo Container Freight Index (NCFI) commentary stated that the Nordic and Mediterranean routes “continue to cut prices to win more bookings”, leading to a drop in spot rates on these two routes.

Meanwhile, consulting firm Sea-Intelligence believes shipping lines are too slow to adjust capacity ahead of China's National Day holiday. Chief executive Alan Murphy said: "If the shipping companies want to announce more suspensions, then there is not much time left."

Taking the trans-Pacific route as an example, total capacity on the trade lane during Golden Week is currently cut by just 3%, compared with an average of 10% between 2017 and 2019, according to Sea-Intelligence.

Murphy said: "Furthermore, with tepid peak season demand, it can be argued that blank voyages required to keep market rates stable will have to exceed 2017 to 2019 levels, which will give carriers a breakout strategy in October. bring further pressure."