Bangalore: South Korea’s biggest container shipping firm and West Asia’s top container carrier have teamed up to launch a fixed-day, weekly direct service from India to Europe, despite falling volumes and freight rates triggered by the global economic slowdown. The Asia Europe Container Service 1 (AEC 1) was launched on Wednesday by Hanjin Shipping Co. Ltd and the United Arab Shipping Co. (UASC), which is owned by six West Asian countries—Bahrain, Saudi Arabia, Iraq, Kuwait, Qatar and the United Arab Emirates.
The service will run from Jawaharlal Nehru Port in Navi Mumbai with 10 container ships, each of which will have 3,800 standard container capacity, to European ports such as Antwerp, Thamesport, Hamburg and Rotterdam, with a stop at the Pipapav Port. While admitting the market conditions were not favourable to all carriers, S.H. Lee, managing director of Hanjin Shipping India Pvt. Ltd, the Indian unit of the South Korean firm, said, “The new service was something that was planned a long time ago and not something that has happened overnight.” Hanjin and UASC currently run container shipping services from India to the US east coast, Mediterranean countries, the Far East and West Asia.
Right timing: A Hanjin container ship. The new service was?planned a long time ago and not overnight, said S.H. Lee of Hanjin. Bloomberg
Between January 2007 and June 2008, exporters in India shipped 18,000-20,000 standard containers a week to Europe. Those volumes are now down to about 10,000.
The cost of moving a standard cargo container from India to Europe has halved to $450-500 (Rs21,960-24,400) from about $1,050-1,100 in June–July, excluding surcharges by carriers for changes in ship fuel (bunker) prices and currency fluctuations.