Shippers doubt MSC ended NE-Asia bookings on cargo surplus as claimed

THE Mediterranean Shipping Company (MSC) has stopped bookings on its four North Europe-Far East loops until July 9 due to vessels being fully booked, but shippers of metal scrap and waste paper don't believe it.

The services of Silk, Lion, Swan (slots on CMA CGM's FAL 3) and Condor (slots on CMA CGM's FAL 1 and UASC provides two vessels) will be restricted despite a peak season surcharge increase of US$500/TEU introduced on Asia-Europe routes last month.

According to a report from Berkshire-based recycling consultancy SCM scrap-ex, exporters are sceptical of MSC's declared reasons for refusing bookings suggesting instead that the restrictions have been imposed to increase freight rates.

The company said this because Containerisation International's Freight Rate Forecaster calculations does not suggest a surplus of cargo - certainly not on the Asia-Europe backhaul. Second quarter cargo growth declined year on year with a slight increase of 7.3 per cent from Europe and just 1.7 per cent uptick for Mediterranean.

The priority for a carrier such as MSC with a trade route imbalance is to get empty boxes back to Asia to load up with high paying westbound. Repositioning empties to generate high returns would be much better than having them sent to the hinterland and wait for their return, said the SCM source.