Six box lines that joined the trans-Pacific route over the last couple of years will represent nearly 19 percent, or $150 million, of the estimated $800 million in total losses on the trade this year, according to container market consultant Alphaliner.
Four of the carriers (The Containership Company or TCC from Norway, Compañía Sud Americana de Vapores or CSAV from Chile, Horizon Lines from the U.S., and Grand China Shipping) have been forced to leave the trans-Pacific trade due to strong competition and excess capacity.
TCC, which began operations in April 2010 serving Taicang, near Shanghai, and Los Angeles, dropped its trans-Pacific service in April 2011 and obtained bankruptcy protection from its creditors in July this year.
CSAV suspended its Asiam service from India, Southeast Asia, and China to the U.S. West Coast in June this year due to “prevailing negative market conditions” on the trans-Pacific trade.
Grand China Shipping suspended this month its weekly trans-Pacific container ship service launched in March 2011, while Horizon Lines stopped its own service in early November of this year.
The remaining new entrants—Hainan PO Shipping from China and TS Lines from Taiwan—are trying to stay alive as they incur deepening losses in the midst of lukewarm demand, rising fuel costs, low shipping prices, and bigger rivals.
The quick exit of the new carriers from the trans-Pacific lane will dissuade other cargo ships from entering this market in the near future, noted Alphaliner.
