2M Alliance Announces Deep Cuts to Asia-Europe Services
Maersk and MSC, the world's largest ocean carriers and the two primary partners of the 2M alliance, have implemented deep cuts in service on the core Asia-Europe trade lanes due to the COVID-19 outbreak. This new round of cuts is driven by falling demand in Western consumer markets, not by the supply disruption in China that forced carriers to slash dozens of sailings in February and March.
The new cuts include a temporary suspension of the 2M AE20/Dragon and AE2/Swan services for all of the second quarter of 2020, beginning with the sailings of the MSC Venice and the MSC Sixin. The MSC Sixin is one of MSC's new Megamax-24 class of ultra-large container ships, the largest of their kind at 23,500-23,700 TEU each; in general, ULCVs achieve economies of scale when sailing full.
The suspension of these two services alone removes about one fifth of capacity on the trade lane, according to Danish shipping consultancy Sea-Intelligence. "Additional blank sailings on other services might be announced during the coming weeks, depending on the market demand. We will keep you posted in due course," MSC said in a statement.
Other shipping alliances have not yet announced parallel reductions, but Sea-Intelligence forecast more cuts to come from the competing Ocean Alliance and THE Alliance. Analysts expect containerized trade to shrink this year due to strict public health measures and related challenges in Western consumer economies.