28 June 2023 (Lloyd's List) - CONTAINER lines have removed almost a quarter of the available capacity on routes from Asia to North America, leaving an average of 516,000 teu of slots available each week.
Figures from Alphaliner show, however, that the number of vessels on these trades is down by just 12.6%, as lines utilise a greater number of smaller ships to serve east coast terminals via the Panama Canal.
At the beginning of June, Alphaliner identified 514 vessels trading between Asia and North America with a combined slot capacity of 4.9m teu. This was down from 674 ships aggregating 5.6m teu a year ago.
Fleet-footed Mediterranean Shipping Co has been the fastest to remove tonnage from the market, but the smaller upstart carriers that launched services during the pandemic are now also exiting following normalisation of freight rates.
“By the end of this month, all newcomers which joined the trade when it was booming during the Covid-19 pandemic will have left it again,” Alphaliner said.
“In June 2022, the fleet deployed by newcomers such as CULines, Sea Lead, Pasha, Transfar, TS Lines, BAL and Jin Jiang Shipping represented nearly 138,800 teu, or 2.5% of the total fleet. This month only CULines is left after the June 1 decision of Pasha to terminate its service operated on behalf of wholesaler Costco.”
The Chinese carrier has confirmed it too will exit, removing its last 11,600 teu slots before the end of the month.
MSC has seen the largest removal of capacity at 35%, but some lines have been adding capacity in its place, despite poor cargo demand and low freight rates, according to Alphaliner. “This is the case for Zim, whose current fleet capacity on this trade is 21.3% bigger than a year ago,” it said.
“The Israeli carrier has closed all of its so-called Zim eCommerce Express Asia-US west coast loops, but redirected the ships affected to a new Southeast Asia-Asia-US east coast ‘Zim eCommerce Express Baltimore’ service, which requires 13 vessels.”
Another reason for its growth was the delivery of a series of 12,000 teu-15,000 teu newbuildings, which are deployed in the Asia-US east coast ZCP loop.
Other carriers that increased capacity included Swire Shipping, after it took over the liner activities of Westwood, Evergreen, Ocean Network Express and Yang Ming.
Even though it has removed more than a third of its capacity, MSC still remains a large player in the market.
“It remains remarkable that despite the closure of several services the Geneva-based carrier still deploys more capacity in standalone loops — 232,700 teu — than in 2M services — 145,500 teu,” Alphaliner said.
“MSC thus remains the largest carrier on the trade offering non-alliance services, with a fleet twice as big as the number two, which is Wan Hai Lines.”
But it is some way of CMA CGM, which despite reducing its capacity by 10%, still has over 700,000 teu deployed in alliance and standalone services.
