“Since Intra Asia is the feeder arm for global carriers, therefore, Intra-Asia cargo can support logistics costs savings in the future. We cannot treat Intra-Asia purely as a profit centre without considering its real contribution to global shipping,” GSL md Danny Hoffmann told Seatrade Maritime News.
While acknowledging that the market is a competitive one with more than 30 regional carriers with connections to large global carriers, Hofmann said “each carrier holds its own distinct strategy and business model”.
GSL has expanded according to the various sub-markets as they have gained more potential over the years. The line had in fact started services in the Gulf region as far back as 2000 but was not solely focussed on the region and at the same time also launched services between China, Southeast Asia and Indian subcontinent and Northeast Asia, India and the Gulf.
In 2010 it made a return to the Far East-Middle East market and this marked a renewed focus on the region as well as more aggressive services into Africa. A succession of services followed over the next few years to link Chinese ports to West Africa, the subcontinent and the Middle East.
The launch of its new GCX service, linking China with ports in Sri Lanka, Pakistan, the Middle East and Southeast Asia, is the first phase in its further expansion into the South Asia and Middle East markets, GSL said.
“Intra-Asia/Middle East and Africa is one of the biggest global shipping markets. On the way from China to the Middle East and Africa is the One Belt One Road economic entity and there definitely will be huge economic growth and development,” said Hofmann.
This growth is not only being driven by new market dynamics but also the some fundamental changes in the shipping industry, he said. “This is not only the new market dynamics, the shipping industry needs the benefits of scale and efficiency. And with a larger network scale, there will be the synergy to benefit not only the Intra-Asia but also global trades,” pointed out Hofmann.
GSL has been reacting to this by making changes to its network along the way. Earlier last year it revamped its China-subcontinent services to introduce more efficient coverage with less loops but bigger 8,500-teu vessels, the biggest in GSL’s fleet.
While remaining coy on GSL’s exact plans and future new routes, Hofmann said: “As a carrier, we are dedicated to providing the most competitive service to our customers, with the best transit time, high frequency, and high schedule integrity. We are focused on the quality of our service and customer needs which helps us to optimise our service routing which provides us with a competitive advantage.”
The line has however expressed an interest in the African market since at least 2015 and with more container terminal developments there lately, especially by Chinese companies, more services are likely to be in store.
Other trends looking ahead are a more challenging market as well more increases in capacity. “From my view, the shipping industry is becoming more challenging and will be even tougher in the future. The global carriers are looking for capacity upgrades for slot cost advantage,” said Hofmann.
“Meanwhile, cascading of capacity is the main pressure for Intra-Asia markets, however, this will also bring the chance for carriers to consider, is it the time for a change to focus on a better service structure and cost efficiency,” he concluded.
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