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ZIM, 2M tie-up seen easing classic Panamaxes out of Far East-USEC trade

The move by Zim to join the 2M alliance on the Far East-US East Coast (FE-USEC) trade will result in some reduction in capacity and also free up a large number of classic Panamax-size container ships, Alphaliner said in its weekly newsletter.

The tie-up will see the seven weekly strings currently being operated by 2M and Zim being cut down to six in September and weekly capacity reduced from 47,500 teu to 45,500 teu.

Analysing the recent move by alliance of the top two container shipping lines and Zim, Alphaliner noted that when the lines start sailing the new schedules in September, total nominal capacity on the trade will be reduced by 1.3% to 153,300 teu from 159,500 teu as at July. The analyst pointed out however that this reduced capacity still represented a year-on-year growth of 6.9% over the 149,250 teu deployed in September 2017.

In addition, the total number of weekly FE-USEC services will fall to 18 strings in September from a high of 25 in 2015. However, the average size of the vessels deployed will be nearly doubled at 8,860 teu compared to an average of just 5,750 teu in 2015. This could partially account for the negligible effect on overall capacity in the trade despite the reduction in services.

However more significantly, Alphaliner highlighted the fact that the rationalization will free up 11 ships of 4,000-7,000 teu. As well, with the introduction of larger vessels on the trade, some 16 classic panamaxes of 4,250 teu to 5,080 teu comprising 10 operated by Maersk and six from Zim are expected to become redundant, with all expected to be withdrawn from the FE-USEC trade as they are some of the smallest ships that remain on the route.

Read More: First post-Panamax containership calls PSA-Panama

This will leave only nine ships of 4,250 teu, operated by Cosco on its ’GME/AWE7’ service connecting the Far East and the US Gulf (USG), as the only classic panamax containerships operated on this route. The so-called classic Panamax, designed for the maximum capacity of the old Panama Canal before its expansion, used to be the dominant vessel on this trade with over 190 of them deployed on the all-water route between Asia and the US East Coast at its peak in 2006 and 2007. Alphaliner did not comment on cascading or other possible redeployments for these ships.

The average vessel size on the FE-USEC/USG services via the Panama Canal has been increasing rapidly since 2016, and will reach 8,800 teu by September compared to less than 4,600 teu prior to the opening of the neo-panamax locks in June 2016, Alphaliner said.

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