Containership carriers have struggled to match capacity to demand. Will new services take enough capacity out to match the slumping box traffic? Perhaps services to the US East Coast will switch from the Panama Canal to the Suez? And will a box carrier merger in Asia be a market setter? UK based-Paul Richardson’s analysis of the box business holds some surprises for the New Year. By Paul Richardson, AJOT It has been no secret for several years that the Asia/North Europe and Asia/Mediterranean container trades are taking the full toll of Europe’s economic recession. Container lines have struggled with adjusting the capacity/demand ratio to accommodate the downturn, and the inevitable has happened. Alliances and individual carriers have been forced into a situation of a closer working relationship, either through merging of groups, or by a series of vessel and slot swop agreements that would have been unheard of some years ago. However, one of the biggest surprises was the formation of the so-called G6 Alliance, comprising Hapag-Lloyd, NYK, OOCL, APL, Hyundai Merchant Marine and MOL (Mitsui-OSK Lines). The six were member lines from the Grand Alliance and New World Alliance on the Asia/Europe trades, and the move not only reduced capacity, but combined lines, all with their own specific market clout. More importantly, the resulting six G6 services covering the Asia/North Europe trade, and a further two concentrating on the Asia/Mediterranean sector, effectively reduced capacity compared with the original Grand and New World setups, and allowed for a more combined and positive approach to the market downturn. As these changes occurred, Mediterranean Shipping Co (MSC) and CMA-CGM set up a series of vessel and slot sharing agreements covering the Asia/North Europe trade, and Maersk together with CMA-CGM strengthened their existing service agreements on the Asia/Mediterranean trades. Although the Asia/US trades are nowhere near as severely impacted as a result of the economic downturn as those covering Asia/Europe, the success in merging two individual alliances, and the closer working relationship through slot and vessel sharing agreements, has worked. The resultant adjusting of capacity to meet market demand has obviously proved successful. And the next question is when does the initiative move further ahead? On the Asia/US trade, the six lines of the G6 continue to work under their separate Grand and New World Alliance banners, but it would seemingly be inevitable that at some stage, either the US West or East Coasts, or even both will welcome a new group name to their terminal shores. At the end of October, the New World lines filed with the Federal Maritime Commission (FMC), an application to have their existing Asia/US agreement extended to March 1st 2016, a move that could lay the foundations for the Grand Alliance lines to follow. Although any formation of a G6 Alliance in its totality on the Asia/US trades could be seen as a long way off at the moment, it is not beyond the realms of possibility. Some of the six lines, as well as others including Zim, and separately, Maersk, CMA-CGM and MSC, already work together through a mismatch of vessel and slot sharing agreements to cover the Asia/US trades, and thus the foundations are there – it just needs that all important FMC filing application to take the initiative that step further. Still on the same trade lane subject, there is increasing belief that some of the big lines will launch new Asia/USEC services through the Suez Canal, and in some cases, at the expense of existing services presently transiting the Panama Canal. Most shipping lines acknowledge that the Asia/US East Coast trade faces an industry-wide concern over operating costs, and the dilemma of whether a service via the Suez Canal or whether one via the Panama Canal offers the best perspectives. There is mounting speculation that several of the big names in shipping will withdraw services that presently serve the Asia/USEC trade via the Panama rou