Container tonnage withdrawn from N Asia-Oz trade to firm up rates
CONTAINER shipping lines plan to remove 4,500 TEU of weekly capacity on the North Asia-China-Australia trade lane and take five classic panamax ships out of service, as freight demand collapses
27 November 2019 - 19:00
Alphaliner noted that the joint Australia Express service that is operated by ONE, Yang Ming, Evergreen, APL and Hapag-Lloyd will be shelved along with a service jointly operated by Evergreen, APL and HMM. Both services will be replaced by alternatives by the end of November, reported London's Loadstar.
'Spot freight rates on the China-Australia [trade] have risen by more than 370 per cent since June, when rates reached an all-time low of just US$249/TEU,' Alphaliner said. 'The latest capacity adjustment is aimed at retaining the spot rate gains, despite weakening demand on this route.'
Oceania product manager Greg Paradine at Maersk Line said: 'We have seen an overall reduction in containerised trade from China to Australia, year on year, with only a slight and relatively short, peak season.
'This has resulted in adjusting our capacity to effectively meet the market.'
An unnamed Sydney-based regional sea freight manager at a global forwarder was quoted as saying: 'Something had to happen. According to Container Trade Statistics, TEU volumes [on the North Asia-Australia trade] shipped are down 6.2 per cent year on year.'
'This follows at least five years of growth in volumes shipped, with rates falling below $300/TEU in the slack season. Although carriers' pockets always seem incredibly deep, there has to be a breaking point.'
Capacity reductions, carrier alliances and consolidation have left some stakeholders in Australia concerned at the reduced service options for shippers.
However, a report on the country's container shipping market by the Australian Competition and Consumer Commission (ACCC) pointed out that ocean liner connectivity has 'remained stable, if not marginally improved, compared with levels prior to the 2008 global financial crisis.'
Although, it adds, connectivity has not improved as much as in New Zealand, where ports such as Tauranga can accommodate larger box ships than terminals in Australia.
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