Lines may add capacity ahead of Chinese New Year

Shipping lines will add an additional 5.5% capacity on the Asia-Europe trade before an early Chinese New Year, according to reports by JOC quoting Sea-Intelligence Maritime Consulting.

The container shipping alliances are expected to deploy 3.55 million TEU in the final quarter of 2019, which would be equal to a 5.5% increase compared with the same period last year.

Such an increase in supply is surprising in that it immediately follows a lacklustre peak season and comes after a high level of blanked sailings in July through October, suggesting carriers are not expecting a weakening of demand in the final few months of the year.

Factories in China shut down for three weeks over Chinese New Year, which falls on the 25th January in 2020, with shippers traditionally transporting their consignments in the weeks and months ahead of the holidays.

Chinese New Year fell in February this year, with strong demand beginning in late November and continuing through December and January, with rates rising to their highest levels in over a year, a third higher than many prevailing rates.

There is no sign of a significant peak yet, though this may change as the year closes. There are some concerns over the potential impact of IMO 2020 and how an increase in volume lates in the fourth quarter could bump into a shipping industry that must virtually switch overnight from high to low-sulphur fuel.