New turmoil may be on the cards for Asia-Europe shippers as carriers transition into their new alliances and vessel-sharing programmes.
The total weekly capacity of the new alliances from Asia to North Europe will increase by almost 10%, as THE Alliance and the 2M Alliance will provide one more string than currently offered and are preparing for the phase-in of additional vessel capacity, which would normally put downward pressure on rates, but with no competition from independent carriers that’s not certain.
Carriers’ reluctance to give up any market share is apparent from the planned transition to the new alliance networks and the structure of the new services, which launched on April 1, suggest that the carriers are seeking big volume business.
No void sailings are scheduled on any of the new strings to be launched in April and some of the old services that are being phased out, will provide overlapping sailings that will effectively create additional capacity during the transitional period, so backlogs should clear quickly.
The 2M carriers plus HMM’s average capacity on the Asia-North Europe route will increase by around 20,000 TEUs per week, or 23%, from 83,500 TEUs to 103,000 TEUs.
The capacity increase is partly motivated by the extra volumes to be brought by HMM and Maersk Line’s recently acquired Hamburg Süd, which will take about 6,000 TEUs and 4,000 TEUs, respectively, of weekly slots on the alliance’s services from April 1.
Ocean will offer six weekly strings and THE Alliance will offer five, with a combined weekly capacity of 155,000 TEUs. They will provide the same total number of weekly sailings as that offered currently by the G6 (four strings), CKYE (four strings), and O3 (three strings), and total weekly capacity will increase by about 13,000 TEUs, or 9%.
Shippers will have a total of 372 direct port pair options in the westbound leg to North Europe, but 113 of these pairs will be unique to one alliance, so you would expect the pricing pressure in 1/3 of all port pairs to be greatly reduced.
For the biggest shippers on these routes it means faster transits and lower rates due to alliance competition for their business.
The opposite may be true for smaller and niche shippers, unless they have forwarder representation with the necessary relationships and ability to negotiate effectively with the alliances.
With effective representation shippers should also benefit from lower freight rates as carriers add new cap