The Loadstar recently highlighted how ocean freight capacity from Asia to Europe is being reduced once the new alliance schedules complete their first rotations.
The biggest change in carrier alliances for the past ten years has come into effect this month and as a result capacity is going to be down by around 11%.
The post explains how the total weekly capacity of all containerships prior to the reshuffle was around 249,000 TEU per week. However, that number seems to be about to shrink to 221,000 TEU per week across all Asia-European services.
In the short term, there will likely be little impact, as Chinese export production starts to ramp up again after the New Year closures, but it could start to make a difference later in the year, especially during peak season.
Rates in the market are still relatively inexpensive due to the current low demand levels. There is also the feeling that some carriers are pushing hard for market share in their new alliances.
However, carriers are again looking to drive rates up with several proposing a General Rate Increase (GRI) in March. While the market doesn’t seem to be positioned for a GRI right now, that doesn’t necessarily mean that rates wont go up.
The team at Killick Martin will be monitoring developments closely during the next week or two. Should you require further information, then please do not hesitate to contact us.
