A near 10% increase in capacity on the Asia-north Europe trade in the coming months could trigger more freight rate turmoil, according to analysts.
So far this year, spot rates on the key east-west routing have been maintained at prices approaching $1,000 per teu. Alphaliner says, however, that as carriers phase additional capacity into the trade, rates will come under increasing downward pressure.
With new alliance programmes from 2M, the Ocean Alliance and The Alliance due to commence at the start of April, there will be 17 weekly strings between Asia and northern Europe. This would be one more than currently offered by the existing four carrier consortia, it said.
“Total weekly capacity to north Europe will increase by 9.6%, compared to the services offered now,” said Alphaliner.
“The carriers’ reluctance to give up any market share is apparent from the planned transition to the new alliance networks. No void sailings at all are scheduled on any of the new strings to be launched in April, even though some of the old services, in the process of being phased out, will provide overlapping sailings.”
This, it said, would result in additional capacity on the route during the transitional period.
The majority of new capacity will come from 2M. Not only will it fully upgrade all of its existing loops with 18,000+ teu ships, but it will also launch a sixth service at the start of the second quarter.
“The 2M carriers’ average capacity on the Asia-north Europe route will thus increase by some 20,000 teu per week, or 23%, from 83,500 teu to 103,000 teu,” explained Alphaliner.
The increase comes partly as extra slot space will be needed to handle the extra volumes brought forward by Hamburg Süd and Hyundai Merchant Marine, which will take around 6,000 and 4,000 teu respectively.
“These slots account for 12% of the capacity increase, while Maersk and MSC will still see their net weekly capacity increase by some 11%.”
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