Asia-US west coast box shipping lanes are stripping 7,000 TEU of capacity in May
CAPACITY on Asia-US container shipping routes will be reduced by 7,000 TEU per week from May, says Alphaliner
CAPACITY on Asia-US container shipping routes will be reduced by 7,000 TEU per week from May, says Alphaliner.
But this move may not be enough to mitigate the negative drag of US import tariffs and the continued switch from west to east coast ports, following the expansion of the Suez Canal.
The revised alliance networks, after April 1, will see Hyundai Merchant Marine scrap its standalone services as it joins THE Alliance, while its South Korean compatriot, SM Line, will delete one of its two strings in favour of a slot charter with the 2M alliance of Maersk and MSC, and Cosco and Wan Hai will remove one loop of their VSA after PIL's exit, reported UK's The Loadstar.
The consultant said the combined weekly capacity offer of 298,000 TEU on the route would be some 2.3 per cent lower than in 2019.
According to Blue Alpha Capital, total inbound volumes at the top ten US container ports dropped by 4.1 per cent in January year on year to 1.7 million TEU.
Founder of the New York-based consultancy John D McCown attributes declines in traffic, including a substantial 12.7 per cent fall in December, directly to the impact of the US tariffs on Chinese imports.
Notwithstanding that the Phase One agreement between the US and China suspended a planned 15 per cent tariff on some $160 billion of imports and halved the duty on another $120 billion of goods from 15 to 7.5 per cent, there seems little prospect that the remaining 25 per cent tariffs on $250 billion of Chinese imports will be removed this side of November's presidential election.
'While the Phase One agreement removed the likelihood of further tariff increases, the rate reduction in one tranche only marginally reduced the effective tariff rates on China,' said Mr McCown. 'The current expectation is that those tariffs will remain in place at least through 2020.'
Blue Alpha Capital is forecasting a 10 per cent year-on-year decrease in volumes at US ports, with the coronavirus crisis a 'new negative catalyst' to first quarter volumes.
Indeed, it remains to be seen whether the cargo loads lost from the 50 additional blank headhaul sailings on the transpacific during the virus-induced lockdown in China will be recovered in the second quarter.
The volume deficit in January provides further evidence that ports located on the east coast are continuing to make inroads into seizing what was traditionally west coast traffic. At 915,000 TEU, the import volume across west coast port terminals was down 5.1 per cent on the year before, whereas east coast traffic dropped by only three per cent.