Cargo Business Newswire

Tuesday, December 9, 2014

Maersk terminating Trans-Pacific 5 service

Maersk Line will close down its Trans-Pacific 5 (TP5) US-flag service in January 2015 as part of a strategy to eliminate unprofitable Pacific services.

The end of the current TP5 service from North Asia to Los Angeles-Long Beach and Oakland won’t produce a significant reduction in the total capacity on the trade route because it is a comparatively small service.

The five ships on the route include four 4,300-TEU vessels formerly owned by Sea-Land Service and one ship chartered from Mediterranean Shipping Co.

In a customer advisory, Maersk Line said the overall trans-Pacific trade and its TP5 service between North China, South Korea and Japan to the West Coast in particular had been unprofitable for nine out of the last 10 years.

The world's largest shipping company said that the cancellation of the service "by no means suggests our commitment to the trans-Pacific trade has wavered. In fact, we see it as very much the opposite."

The termination of the TP5 route will cut Maersk Line's current capacity between Asia and Southern California by 13 percent and its overall trans-Pacific capacity by 10 percent. But the company plans to fill the void by covering ports in the region with calls made by the new 2M Alliance it has made with MSC, which will start in Jan. 2015.

The action is part of a plan to drop unprofitable services and position the shipping giant so that it can negotiate higher freight rates during next spring’s annual trans-Pacific contract talks.

For more of the Big News Network story: www.bignewsnetwork.com

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