Tough market conditions on the major east-west trade lane have led to carriers cutting voyages. But demand is failing to keep up with even reduced capacity.
As the market prepares for further introductions of ultra large tonnage, carriers struggle to fill the ships they already have.
BOTH HMM AND EVERGREEN ARE BRINGING NEW TONNAGE ON TO THE ASIA-EUROPE TRADE LANE.
CAPACITY adjustments on the Asia-Europe trade lane have yet to pull up rates, according to new analysis from Alphaliner.
Shanghai Containerised Freight Index spot rates from China to northern Europe stood at just $810 per teu last week, down 19% since the beginning of the year and 15% below last year’s comparable rate.
“Carriers have struggled to raise rates on the route this year due to the introduction of new megamax vessel capacity on the route, notably from the addition of one additional string by the Ocean Alliance in April this year,” Alphaliner said.
Blanked sailings had yet to help raise rates, it added.
According to Alphaliner figures, a total 42 sailings have been blanked in the first three quarters of this year, compared with 16 void sailings in the same period last year.
The news comes despite Hyundai Merchant Marine’s decision to remove 4,900 teu per week with the closure of its AEX service, which utilised 5,000 teu ships for its sole Asia-Europe service.
Instead, HMM will take slots from its future The Alliance partners. HMM is due to become a full member of The Alliance from next April.
“This move allows HMM to offer 10 North Europe-Far East loops as its existing 2M+H strategic co-operation agreement with the 2M alliance of Maersk and Mediterranean Shipping Co will be maintained until its expiry at 31 March 2020,” Alphaliner said.
The closure of the AEX service will mean that HMM will have no ships of its own operating on the Asia-Europe trade lane until next April, when it will introduce its 12 23,000 teu newbuildings into The Alliance services.
Despite the overcapacity difficulties already faced on the Asia-Europe trade, Evergreen today confirmed it was going ahead with an order for up to 11 ships of 23,000 teu.
As these can only be deployed between Asia and Europe, when delivered they will add another 250,000 teu of capacity to the trade.