Carriers revamp services in bid to absorb new tonnage and secure success of next round of rate hikes
Capacity additions to transpacific routes this year are expected to put severe pressure on general rate increases (GRIs) planned for April and May.
Transpacific Stabilisation Agreement (TSA) carriers claim that freight rates are “below compensatory levels”, despite previous adjustments, and as a result they are recommending a GRI of US$400 per feu on cargo travelling to the US west coast and $600 per feu to all other destinations, from 1 April.
Carriers revamp services in bid to absorb new tonnage and secure success of next round of rate hikes
Capacity additions to transpacific routes this year are expected to put severe pressure on general rate increases (GRIs) planned for April and May.
Transpacific Stabilisation Agreement (TSA) carriers claim that freight rates are “below compensatory levels”, despite previous adjustments, and as a result they are recommending a GRI of US$400 per feu on cargo travelling to the US west coast and $600 per feu to all other destinations, from 1 April.
Analyst Alphaliner said carriers “want to ensure that 2013-14 contract rates contain meaningful net increases relative to 2012 contract levels”.
However, capacity on the transpacific is expected to outstrip demand growth and is forecast to grow by 6% this year.
The analyst said carriers were being pushed to deploy all newbuildings scheduled for delivery this year and have already announced a number of capacity upgrades and new transpacific services.
“With demand on the moribund Far East-Europe routes remaining stubbornly weak, carriers have been forced to abandon their plans to add new capacity on these services in 2013,” said Alphaliner.
The G6 alliance (APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK and OOCL) and CKYH carriers (Coscon, K Line, Yang Ming and Hanjin) have recently followed Maersk in axing planned services this year.
Maersk will no longer launch its AE9 service, the G6 its Far East-Europe Loop 3 and CKYH has cancelled the NE4. As a result, 30 ships of 7,000-10,000teu will be placed on different trade lanes.
“The transpacific routes are expected to receive the majority of this surplus tonnage, either directly or from cascading,” said the analyst.
From May, Evergreen will deploy five vessels of 3,500-4,200teu on its new Far East-US west coast service (CPS2).
The CKYH carriers will launch a new Far East-US east coast (AWS/AWE7 service via Panama), deploying ten 4,200teu vessels, and upgrade several of their Far East-US west coast strings, starting with the PSX, which is being upsized from the 7,500teu to 10,000teu scale.
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