Southern India’s ocean trade continues to be a challenging market for both Maersk and Hapag-Lloyd, with the pair cutting back port calls.
According to industry sources, the Gemini Cooperation partners have pared down the loading space they share on a direct call at Ennore port (Chennai) for Europe trades, which began in early February.
The new joint loop, branded ME2 by Maersk and IEX by Hapag-Lloyd, is the only long-haul mainline operation out of India’s east coast, with most cargo generally transhipped over Sri Lanka’s Colombo port or Singapore.
“Cargo lifts on recent sailings have been lower than the targeted levels,” one Gemini line sales executive said.
“The first call [Maersk Stadelhorn] had good volumes, but it was more like a one-off case,” the source noted.
The source also confirmed a marked reduction in the space allocations for both partners due to sagging bookings.
According to available data, Maersk Stadelhorn saw some 3,200 container exchanges on its inaugural call, while the upcoming Maersk Genoa, expected Saturday 15 March, would see some 2,100 box moves.
ME2/IEX has a rotation of Ennore-Colombo-Algeciras-Rotterdam-London Gateway-Bremerhaven-Rotterdam-Port Tangier-Colombo. Maersk earlier claimed the service would offer “a huge opportunity” for growth in the retail, lifestyle, and automobile component sectors in and around Chennai.
Local industry sources believe that, in addition to the general sluggish market conditions, the Gemini loop is also facing cargo strain due to frequent ad-hoc calls from MSC, thanks to the operational flexibility it has at Ennore, which is now a joint-venture between Adani Ports and MSC’s terminal arm, TiL.
As the volume declines persisted, Maersk and Hapag-Lloyd have dropped booking rates substantially to fill capacity as close as possible, sources said.
The drastic changes implemented by Maersk in its “emergency contingency surcharges (ECSs)” for the Chennai region from February through March is proof of that adjustment. The ECS scale is now down to $700 per container from the $2,000 announced on 15 February, data shows.
Under the Indian Gemini framework, Maersk has higher space stakes at Ennore, 60%. Prior to Gemini, Maersk and Hapag-Lloyd had to end up pulling back their independent operations in the South India-Europe trade due to demand and service structural problems.
Ennore is the only port of call on India’s east coast for the Gemini string, as the network pursues a hub-and-spoke model of operations.
On a broader industry view, the Gemini service, structurally designed with 90% schedule reliability, holds considerable supply chain significance for southern India hinterlands as the market gains from industrial developments taking hold in the region, propelled by the trade diversification in Asia. Tamil Nadu State now has high stakes for the export of textile and electronics products out of India.
Meanwhile, MSC is also stepping up its coverage out of southern India, having extended two of its Asia-Europe-Mediterranean loops to Vizhinjam port, covering its Jade and Dragon networks.
Thanks to that push, Vizhinjam has gained significant transhipment trade pace, racking up some 79,000 teu in February out of 40 ship calls – mostly at the expense of Sri Lanka’s Colombo.
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