Shipping line MISC Berhad will focus on the potentially lucrative intra-Asia and Asia-Middle East container trades once it quits the Grand Alliance at the start of 2010, according to its president and CEO, Amir Hamzah Azizan.
He told IFW: "We believe we can build a strong market presence and leadership in the Middle East/Indian sub-continent to Asia trade through our Halal Express service.
"This will also provide our revised intraAsia focus with a strong niche focus that will underpin our new franchise."
Seven MISC vessels currently ply AsiaEurope services with Grand Alliance partners Hapag-Lloyd, OOCL and NYK.
MISC will rationalise its container fleet to suit intra-Asia services in time for its withdrawal from the Asia-Europe trade.
"Naturally, there will be mismatched vessels and efforts are being made to address this through straight sale, charters or vessel swaps, " Azizan said.
MISC has found it increasingly hard to compete in the Asia-Europe trade since the introduction of larger containerships and collapsing rates.
"Economies of scale and size are important drivers in the liner trade, " said Azizan.
"Given the amount of resources and investment required to compete head-on and in order to build a resilient business that can weather difficult economic conditions, we believe our revised focus on a smaller and niche trade portfolio will allow us to accentuate and build on present strengths. It will also enable us to build a competitive advantage and compete on a sustainable basis over the longer term."
Philip Damas, of industry analyst Drewry, said he was not surprised by MISC's decision.
He expected other shipping lines to follow suit and leave non-core trade lanes, particularly Asia-Europe and transpacific.
"Some of the shipping companies are scared by the scale of losses they are accumulating, " he said.
However he didn't feel shipping lines withdrawing from Asia-Europe should be a major concern for forwarders and shippers. He said: "There is sure to be consolidation of carriers and [the trade] won't be as diversified. But there are still more than 25 carriers, so it's not a serious concern yet."
In a statement, the Grand Alliance said:
"We greatly regret that MISC, as a founding member, is withdrawing but respect its decision. The withdrawal of MISC will not affect sailing frequencies, transit times or service structures. Nothing will change for our customers."
Figures from the European Liner Affairs Association revealed its members' AsiaEurope westbound traffic was down 17% year-on-year in March to 968,000teu.
However this is an improvement on February when volumes were down 32%.
