A tale of two box trades

7/6/2020

Container lines are bringing capacity back far more quickly on the transpacific trade than on the Europe-Asia lane as coronavirus lockdowns are eased, according to the latest industry analysis by Alphaliner.

As a result, while vessel capacity on the Asia-Europe trade is still far below pre-coronavirus levels, capacity available to shippers on the Asia to North America lane – a market described by one leading forwarder as “going through the roof” earlier this week – is now edging close to 2019 levels.

Vessel capacity in the Asia-Europe trade stood at a weekly 361,100 teu on 1 June, 74,300 teu or 17.1% lower than a year earlier. 

“The 17.1% capacity reduction is, however, lower than the 20-30% quoted in some media reports which are based on the count of the number of blanked sailings,” added Alphaliner.

Both the 2M and THE Alliance consortia have temporarily suspended their largest Asia-North Europe loops until the end of September, but megamax vessels deployed on these loops have been redeployed to other Asia-Europe services where the ships have in many cases replaced 13,000-15,000 teu tonnage, noted the analyst.

  

The service withdrawals have varied largely by alliance. “THE Alliance and 2M Asia-Europe capacities are 22.7% and 18% lower than last year, which is largely due to the suspension of services,” reported Alphaliner. 

“As the OCEAN Alliance has not suspended a single service and has only voided individual sailings to limit capacity, the capacity offering of COSCO Group, CMA CGM and Evergreen is down by only 12.4% compared with 1 June 2019. 

“This also explains why the market share of the OCEAN Alliance has increased from 37% to 39% at the expense of THE Alliance (from 25% to 23%). The 2M market share remains unchanged at 37%.”

By contrast to the Asia-Europe market, Alphaliner predicts that transpacific capacity in July will return to around the same level as a year ago.

“Weekly capacity from the Far East to North America stood at almost 436,300 teu on 1 June, which was 24,300 teu or 5.3% lower than on 1 June 2019 based on usable teu,” said the report. 

With capacity added throughout June and more to come, Alphaliner believes this is a sign demand is now recovering. “Capacity between the Far East and North America could even increase further this summer if 2M and THE Alliance resume in August two Asia-USEC services that the carrier alliances suspended from April until the end of July,” it said.

“The fact that THE Alliance is reinstating several sailings that were previously blanked is a further sign that cargo demand is recovering. Evergreen and Yang Ming are also introducing 12,000 teu newbuildings between Asia and the US to replace 8,500 teu tonnage.”