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Asia-Europe routes to see slower, fewer sailings, less capacity

ANALYSTS at Alphaliner have noted that shippers using the Asia-North Europe trade lanes face fewer booking options than before, meaning longer transit times and less capacity are now the reality

24 March 2019 - 19:00

ANALYSTS at Alphaliner have noted that shippers using the Asia-North Europe trade lanes face fewer booking options than before, meaning longer transit times and less capacity are now the reality.

Their data would appear to dispute the World Shipping Council's claim that its members were offering 'better efficiencies, greater port connectivity and higher service levels.'



According to Alphaliner research, over the past decade the number of weekly services on the route has shrunk from 35 strings to 19, as the average size of the ships deployed has doubled in size, from 7,200 TEU to 15,800 TEU, reported London's Loadstar.



From the end of March, the three major carrier alliances will embark on drastic network changes as they slow their ships down further to pave the way for the addition of new mega ships to offset the higher cost of fuel under the looming new sulphur cap in January 2020.



Alphaliner said that owing to the wider use of slow-steaming and the extended time necessary in ports to facilitate higher container exchanges per call, an average round trip duration for a vessel on the service has risen from 8.7 weeks to 11.3 weeks.



This month, 2M carriers Maersk Line and Mediterranean Shipping Company (MSC) will extend the duration of two of their six loops, the AE5/Albatross and the AE10/Silk services, to 91 days, or 13 weeks, the longest on the trade lane, which Alphaliner notes includes planned diversions for taking bunkers at the Russian Baltic port of Kaliningrad, adding four days.



When the respective carriers announced their network changes in December, Maersk said its decision would mean 'slightly prolonged transit times,' but it was deemed necessary 'to meet our customers' increasing need for reliable cargo delivery.'



MSC, however, said there was a requirement for 'longer time buffers in the schedule' and, attributing the blame for previous schedule unreliability firmly on congestion at ports and added: 'We can only assume that container terminal congestion at the main ports will continue to worsen.'



Alphaliner noted that both THE Alliance, on its FE5 loop, and the standalone HMM AEX services will also see extended transit times.



However, the Ocean Alliance appears to be bucking this trend. Not only is the vessel sharing agreement (VSA) grouping of CMA CGM (including APL), Cosco (including OOCL) and Evergreen adding a seventh NEU7 loop from April, but its NEU3 string will be reduced from 11 to 10 weeks, as part of its network reshuffle.



Altogether, the Ocean Alliance upgrades will see Asia-North Europe capacity up 22 per cent, Alphaliner said, adding that THE Alliance will see a five per cent hike in capacity, while the 2M will remove five per cent of its capacity, 'due to the deployment of smaller vessels on three of its existing loops.'



The overall impact on supply and demand is likely to further depress rate levels that have recently weakened, Alphaliner said.



'Spot freight rates on the Asia-North Europe route have dropped by 28 per cent since the start of the year, wiping out the rate gains that shipping lines achieved in January.



'The planned addition of capacity on this route in April could put freight rates under further pressure, with capacity utilisation on the Asia-Europe route failing to recover from the dip in February following the Chinese New Year holiday.'


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