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Carriers to boost Asia-Europe capacity ahead of early Chinese New Year

CARRIERS are adding capacity between Asia and Europe ahead of an early Chinese New Year, according to Alan Murphy, CEO of Sea-Intelligence Maritime Consulting

Carriers to boost Asia-Europe capacity ahead of early Chinese New Year

CARRIERS are adding capacity between Asia and Europe ahead of an early Chinese New Year, according to Alan Murphy, CEO of Sea-Intelligence Maritime Consulting

29 September 2019 - 19:00

CARRIERS are adding capacity between Asia and Europe ahead of an early Chinese New Year, according to Alan Murphy, CEO of Sea-Intelligence Maritime Consulting.

Carriers are scheduled to deploy 3.55 million TEU on the Asia-North Europe trade in the fourth quarter, an increase of 5.5 per cent compared with the same period last year. Capacity deployed on Asia-Med routes will increase in Q4 by 7.6 per cent year over 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. It also suggests carriers are not expecting a weakening of demand in the final few months of the year, reports IHS Media.



A spokesperson for Hapag-Lloyd told JOC.com that although it was too early to see an increase in forward bookings, a strong increase in demand was possible in December 'in line with what we have experienced over the last years, as well in combination with an early (Chinese New Year)'.



Factories in China shut down for up to three weeks over Chinese New Year, which next year falls on January 25, and shippers traditionally transport their cargo ahead of the holidays.



An Asia-Europe shipper told JOC.com most of his cargo would be shipped out of China in November and December, but he said at this stage it looked as though the increase in volume would be below that of last year.



Chinese New Year 2019 fell in February and the strong demand began in late November and continued through December and January, with rates rising to their highest levels in over a year, stopping just short of $1,000 per TEU. That is close to 40 per cent higher than the current rate, according to the Shanghai Containerised Freight Index (SCFI).



Felix Heger, DHL's head of ocean freight for Europe and Germany, agreed that the traditional annual peak season in the run up to Golden Week that covers China's October 1 national day holiday was behind expectations, but he said there could be late-year demand.



'I can indeed imagine a slightly special peak later on this year, prior to IMO 2020 implementation,' he said. 'However, I also have to say that there is no actual sign of such peak yet.'



Another factor that could influence supply are last-minute carrier preparations for the January 1 switch to low-sulfur fuel per the International Maritime Organization's (IMO's) mandate. An increase in volume later in the fourth quarter could bump into a carrier industry that must virtually switch overnight from high- to low-sulphur fuel.


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