Confidence is being "eroded" and the relationship between the shipping lines and their customers is becoming increasingly strained according to the European Shippers' Council (ESC) as lines announce more vessel cancellations and rising rates.
THE Alliance, a shipping alliance composed of Hapag-Lloyd, ONE, Yang Ming and HMM, has announced its November service adjustments, including void sailings following the German carriers' announcement on 15 October that it would raise rates.
Regulatory authorities have said they will scrutinise the lines' capacity management systems as shippers have complained about sky high rates on both the Pacific and Asia to Europe trades.
The ESC is concerned by the ongoing market behaviour, according to Jordi Espin, ESC policy manager maritime transport, who told Container News, "Current market rules adopted by shipping lines during the pandemic don't follow the logic of framing a common playing field for all stakeholders, since they change and adapt as to benefit only one part."
He went on to explain that "It is not fair that fuel index formulas are not followed during pandemic times when the fuel cost is low, when transit times are longer and when blank sailings impact directly on the shippers' supply chain flows. It is a fact that rates are 67% higher than last year in combination with fewer service calls and less customer service."
ESC urges shipping lines to return to a behaviour that reflects fair play with a clear commitment on transparency and customer centered attention, without under-cover operations in order to reestablish a market chain of trust.
"We are about to reach a point of no return where the market confidence is at stake of being severely eroded. This is not the kind of behaviour that we expect when working in a partnership," concluded Espin.
Hapag-Lloyd, which is the largest company of the alliance, has raised its rates worldwide, but the company says due to the uncertainty caused by the Covid-19 pandemic it will implement, along with its partners, the following void sailings.
Asia and North Europe
FP1 will maintain weekly sailings in November
FP2 will maintain weekly sailings in November
FE2 will maintain weekly sailings in November except in Week 45
FE3 will maintain weekly sailings in November except in Week 47
With these void sailings and the temporary suspension of the FE4 service, THE Alliance says it will continue the Extra Loader Program with sailings on Week 45 to 48 in November, while the participation of the Extra Loader Program will be separately advised by respective Lines, according to a statement.
Asia and the Mediterranean
MD1/MD2/MD3 will maintain their weekly sailings in November, except for in the following weeks:
Week 45 – MD2, MD3 void
Week 48 – MD1 void
Transpacific – West Coast
All PSW and PNW loops will maintain their weekly sailings in November except for the following PS3 Asia-India-Asia leg:
PS3 Asia to India – Week 44, 46 void
PS3 India to Asia – Week 46, 48 void
Transpacific – East Coast (via Panama and Suez Canals)
All USEC loops will maintain their weekly sailings in November except for in the following weeks:
EC3 – Week 45, 48 void
Asia and Middle East
AG1 will remain merged with AG3, and AG2 & AG3 will maintain all sailings in November.
All Atlantic sailings will be maintained except for in the following weeks:
Week 46 – AL1, AL4 void
Week 48 – AL1 void