MAERSK is frequently accused as the aggressor in a destructive war of
attrition that will stands to leave the Danish shipping giant one of the few survivors and with the lion's share of the market, reports
Alphaliner in Paris. Maersk Group CEO Nils Andersen hardly denies it: "It would be natural if the smaller players in this business, or their banks, start questioning whether it's a good idea to keep competing. We are well positioned for a stretch of tough competition," he told Bloomberg.
But Alphaliner commented: "The attempt to force out competitors through a destructive price war has so far failed to achieve any results. So far, there have only been limited capacity withdrawals, even as freight rates are expected to remain depressed until the end of the slack winter season."
But freight rates on the Far East-North Europe trade as reported by the Shanghai Containerised Freight Index (SCFI) have plummeted to US$540 per TEU earlier this month, while the average BAF stands at $755 per TEU.
This means carriers are charging a negative base ocean freight rate of $215 per TEU (excluding surcharges), according to Alphaliner, which also noted that forward rates indicate a mild recovery in late January because of Chinese New Year. "Freight rates should remain below BAF levels. The low ocean freight level is unprecedented, with negative base rates offered in the market since September," said Alphaliner.
It said three strings have been withdrawn so far this year, with a fourth service to follow in December, representing 8.6 per cent of the total available capacity. Overall load factors have remained below 90 per cent on average throughout the year.
Over the coming 14 months, 63 newbuildings of more than 10,000 TEU are scheduled for delivery, and most are likely to be deployed on the Asia-Med-Europe trades, putting further pressure on rates.
There is also talk of the three big Japanese carriers merging into a single company, but together their volume would not be half as much as Maersk's. Nonetheless such a merger would put a "Japan Lines" in fourth place behind Maersk, MSC and CMA CGM - pushing Cosco into fifth spot.
