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Box lines start Asia-Mexico services as rates hit 20-month high

Mainline operators have been starting services connecting China with Mexico as freight rates have reached a near two-year high.

Freight rates for containers from Chinese ports to Mexico's main container port, Manzanillo, are now around US$2,000 per TEU. This has caused CMA CGM, COSCO and MSC to start China-Mexico connections.

On 6 May, COSCO and its subsidiary OOCL started the Transpacific Latin Pacific 5 (TLP5) service, offering transit times of 15 to 20 days between China, South Korea and Mexico.

In response, French carrier CMA CGM will launch a new M2X Mexico Express service on 11 May, calling at Tianjin (Xingang), Qingdao, Busan, Ensenada, Manzanillo, Lazaro Cardenas, Yokohama, Busan, and Tianjin (Xingang).

The M2X will turn in 56 days using eight 4,200 TEU ships, starting with the 4,253 TEU ANL Wangaratta at Busan.

Linerlytica analyst Tan Hua Joo told Container News that the rising rates for China-Mexico service follows that for Asia to the wider South American region, convincing carriers to shift capacity to the lane.

MSC, particularly, has adjusted one of its Asia-US East Coast services, Santana, to cancel out US port calls and focus on Central American calls.

The Santana service’s last New York call was made by the 15,264 TEU MSC Martina Maria on 29 March, with subsequent sailings shortened to a revised Far East-Mexico-Panama-Dominican Republic service calling at Yantian, Ningbo, Shanghai, Busan, Manzanillo (Mexico), Cristobal, Colon (Coco Solo), Caucedo, and Yantian. The revised Santana service turns in 11 weeks, using up to 11 ships of 8,000 to 15,000 TEU on the new eastbound round-the-world rotation, with additional ports added to the rotation on inducement.

Linerlytica noted that MSC's withdrawal of the USEC service will remove some 10,000 TEU a week on the Far East-US East Coast route as it seeks to take advantage of the more lucrative freight rates on the Far East-Mexico and Latin America routes.

MSC’s modification of the Santana service coincides with its launch of a a new Asia-Mexico West Coast Shuttle service calling at Qingdao, Ningbo, Shanghai, Busan, Manzanillo, Lazaro Cardenas, and Qingdao. Starting 15 May, the service will have a turnaround of six to seven
weeks and will deploy ships of 4,000-7,000 TEU starting with the 6,492 TEU MSC Apollo departing Qingdao.

Xeneta’s chief analyst Peter Sand told Container News that Far East-Mexico rates are now at levels not seen since September 2022, as demand for Chinese imports in Mexico went up by over 33% year-on-year in 1Q 2024.

Shippers may be attempting to get around tariffs on goods imported from China into the United States, which have ramped up during the ongoing trade war between the nations.

Martina Li
Asia Correspondent

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