A recent report in The Loadstar has highlighted how ocean freight capacity from Asia to Europe is actually being reduced once the new alliance schedules complete their first rotations.
The biggest shakeup in carrier alliances for the last decade has come into effect this month and as a result capacity is going to be down by around 11%.
The article highlights 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.
This reduction is unlikely to impact services in the short term, as Chinese productions 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 are still relatively inexpensive in the market due to the current low demand. There is also the feeling that some carriers are pushing hard for market share in their new alliances.
However, there have been proposals from several carriers for 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 Atlantic Pacific will be monitoring developments closely during the next week or two. Should you require further information, then please do not hesitate to contact us.
