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admin | Category: Shipping Storage Containers | 16.09.2013
Bangalore: Container shipping operators have started shutting services to the US and Europe as poor cargo volumes and declining freight rates begin to take their toll. Another service to Europe, the Asia Europe Container Service 1 (AEC 1), was discontinued on 9 December, 20 days after it was launched by Hanjin Shipping and UASC.
The AEC 1 connected Jawaharlal Nehru Port and Port of Pipavav on India’s west coast with top European ports such as Antwerp, Thamesport, Hamburg and Rotterdam. The freight rate for moving a 20ft cargo container, or TEU, from India to the US east coast has declined to $1,200-1,300 (about Rs56,400-61,100) from $2,500-2,600 two years ago. Another executive at Japan’s NYK Line said that container cargo volume growth to the US has remained flat this year compared with 2007.
India exported 177,828 forty-foot equivalent units (FEUs) to the US in 2007, 6% less than the 189,249 FEUs it sent to that country in 2006. Container volumes for 2008, which will be available sometime in February, are expected to be at 2007 levels or lower, according to shipping analysts.
The suspension of the Sina service is expected to stabilize rates for other firms running ships on the Indo-US sector because it would reduce capacity by 10-15%. Cargo volumes at major US container ports are estimated to be the slowest since 2004 as the downturn in the American economy continues, according to the monthly Port Tracker report released by the US-based retail trade association National Retail Federation and IHS Global Insight.
The fresh bids by the Union government-owned port are required because Adani Ports and Special Economic Zone Ltd (APSEZ), India’s biggest private port operator, was granted security clearance by the Union government on 3 May to participate in the auction process.
The Essar Group had placed a revenue share price bid of 5.25% for the project when the bid was opened on 24 December.
After discussing Essar’s bid on 26 December, the board of trustees of Chennai port decided to set up a committee to negotiate a higher revenue share with the company. The new terminal, the third at Chennai harbour, will be capable of handling 4 million standard containers a year by 2020, more than doubling its capacity from 2.8 million containers a year. SCI, India’s only mainline ocean container carrier, had been a member of the India, Pakistan, Bangladesh, Ceylon (IPBC) Conference, a group of container shipping firms that operated between Europe and the Indian subcontinent. ELAA can meet in the presence of lawyers to ensure compliance with EC competition law and the minutes of the meeting have to be made available to the public.
Other members include Independent Container Line Ltd, Kawasaki Kisen Kaisha Ltd, Malaysia International Shipping Corp.

SCI currently owns three container ships while another five have been hired to run services to Europe, East Asia and West Asia.
Two new container ships, each with a capacity to load 4,400 standard containers, will join the fleet by the end of November.
SCI will deploy the two new ships on the India Subcontinent Europe Service (ISES) that it runs in partnership with K Line, Zim Integrated Shipping Services Ltd, Yang Ming Line and MISC Bhd. The two new ships are coming into the company’s fleet at a time when the rates for shipping cargo containers have fallen sharply on routes to Europe, the US and even China as over capacity and lack of demand for goods drive down rates. The cost of shipping a cargo container from India to Europe has dropped to about $700 (Rs34,160) per container from about $1,100 in August.
Das said SCI was making losses on the China route as the freight rates did not increase in tandem with the rise in fuel prices that jumped 90% between March and August this year.
Experts say the rates will go down further as some 65 new ships, each with a capacity to carry in excess of 8,000 standard containers, will be launched in the next two years. State of the Art Online Tract & Trace ensures real time status updates fo shipments and also ensures safety of valuable baggage.
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The port has stopped handling dusty cargoes such as coal and iron ore, its main revenue earners, since 1 October 2011, following a Madras high court order to check pollution in northern Chennai.
Das, a director looking after liner and passenger services, days after Europe abolished regimes that set freight rates and surcharges.
The IPBC Conference members set freight rates and surcharge irrespective of market conditions.
But, unlike the conference system, ELAA member lines cannot discuss and agree on rates, surcharges and schedules or exchange information on market share, volumes or prices. The two ships currently servicing this sector will be pulled out and deployed on another route, which is yet to be decided, Das said.
But, everybody is waiting and watching because of the troubles in the financial sector and the slowdown in western economies,” he said. Even rates to China have declined to $600 per container from about $1,200 a few months earlier as China pauses for breath after hosting the Olympic Games. TEU stands for twenty-foot equivalent units, and is an industry measure of capacity of a container. The port then asked for price bids again and received two—from the Essar Group and APSEZ.
BloombergShipping conferences such as IPBC were abolished from 18 October after the European Commission, or EC, removed the antitrust immunity given to such groups operating from Europe.
Now that the fuel prices have reached 2007 levels, there is a little let-up,” he said. Pte Ltd, NYK Line (Nippon Yusen Kaisha Line), Orient Overseas Container Line Ltd, Pacific International Lines (Pte) Ltd, United Arab Shipping Co.

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