30 May (Lloyd's List) - NON-alliance box carriers that ploughed capacity on to the transpacific trade during the peak of the freight rates frenzy have now largely pulled back from the market, following the collapse in demand.
Figures from Sea-Intelligence show that capacity offered by these carriers was at an average of 16,000 teu per week during the first month of 2020. This fell back during the initial shock of the pandemic but as the market recovered, smaller carriers brought in significant volumes of capacity, with up to 50,000 teu a week being offered on average.
But since the downturn in demand that began last year, smaller lines have begun to retreat and the average weekly capacity trends down towards 30,000 teu per week by early 2023.
“In broad strokes, the non-alliance carriers managed to first cut their own market share in half from 10% to 5%, by radically reducing capacity in the initial stages of the pandemic,” said Sea-Intelligence chief executive Alan Murphy.
“Then they tripled their market share, from around 5% to around 15%, during the peak of the market. As freight rates began to normalise and capacity gradually became available again in the market during 2022, the non-alliance market share also began to decline. In essence, for most of 2023, their share has reverted to the 10% levels, which was also seen immediately prior to the pandemic.”
Wan Hai, Matson and SM Line led the pack of non-alliance carriers followed by Zim.
“Wan Hai reacted very sharply to the initial pandemic shock, followed by an equally sharp reaction once the market tightens and freight rates go up,” Murphy said. “SM Line show elements of the same behaviour although not to the same degree as Wan Hai. Coming into 2023, SM Line consistently is slightly larger than Wan Hai.”
CU Lines, which was launched to capitalise on the market disruptions during the pandemic saw heavy initial growth, but also a sharp decrease coming into 2023, he added.
“Overall, the conclusion is as straightforward as it was predictable, already during the pandemic,” Murphy said. “The plethora of new carriers, which entered the market at the peak of the freight rate bonanza, are mostly equally quick to exit the market, under the current circumstances.”
