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February 3 2020

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Februar y 3 2020 | The Journal of Commerce 17 International Maritime HMM'S 12 SHIPS of 23,000 TEU capac- ity will be put to use quickly by the THE Alliance when they start com- ing online in the second half of the year, replacing an 11-vessel string of 15,000 TEU units currently deployed by Hapag-Lloyd on the FE4 service between Asia and North Europe, according to research firm Alphaliner. The Korean flagship line will join the THE Alliance as a full member in a 10-year agreement, teaming up with Hapag-Lloyd, Yang Ming, and Ocean Network Express (ONE) when the carrier exits the 2M Alliance of Maersk Line and Mediterranean Shipping Co., where it has been a strategic partner for the last three years. HMM said full membership in the THE Alliance would give the carrier "the best opportunity to maximize its competitiveness" as the mega-ships are delivered and improve its environmental perfor- mance. The container ship orderbook of HMM stands at 398,400 TEU, the But expectations of continuous growth since then have been shat- tered by the imposition of punishing tariffs on imports from China that began in 2018 and were imposed in stages through much of 2019. Even the Jan. 15 signing of a "Phase One" trade agreement between the US and China is expected to provide only lim- ited relief to importers of consumer merchandise, as tariffs remain on about $370 billion of Chinese imports. Uneven impact Due to their reliance on the vast Chinese market, West Coast ports have been hit the hardest by the trade war. West Coast imports from all of Asia declined 5.5 percent last year, while imports from China moving through the West Coast plunged 12 percent. As some sourcing shifts from China to Southeast Asia and the Indian subcontinent, all-water services from Asia to the East Coast through the Suez Canal become more competitive. Imports from all of Asia through the East Coast increased 2.6 percent in 2019, even though imports from China through East Coast ports fell 6.8 percent. East Coast imports from Asia excluding China increased 22.9 percent. By comparison, imports from Asia excluding China through West Coast ports increased just 9.2 percent, according to PIERS. Gulf Coast ports were the least affected by US tariffs on Chinese imports. Asian imports through the Gulf Coast have risen strongly the last three years since carriers began add- ing services in response to growing volumes in the region. Imports from all of Asia increased 14.3 percent in 2019. Imports from Asia excluding China surged 44.5 percent in 2019 from 2018, and imports from China edged higher by 2.3 percent, all due to the increased capacity carriers have added to the Asia-US Gulf trade lane. Despite the tariffs, the West Coast remains by far the largest gateway for US imports from Asia, handling 10.3 million TEU last year. Asian imports through the East Coast totaled 5.4 million TEU, while imports through the Gulf totaled 796,167 TEU in 2019. JOC email: twitter: @billmongelluzzo "We hope that cooler heads will prevail." Allied reinforcements THE Alliance to roll out HMM mega-ships in Asia-Europe By Greg Knowler HMM's new 23,000-TEU mega-ships will be deployed on THE Alliance's Asia–North Europe FE4 service in the second half of 2020. Sheila Fitzgerald /

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