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Exponential growth in transpacific trade in next 2 months: Sea-Intelligence

CONTAINER shipping consultancy Sea-Intelligence says the planned capacity deployment from the carriers show a capacity growth on the transpacific for December, which is four times higher than in the Asia-Europe trade, and eight times higher in January 2021

18 November 2020 - 19:00

CONTAINER shipping consultancy Sea-Intelligence says the planned capacity deployment from the carriers show a capacity growth on the transpacific for December, which is four times higher than in the Asia-Europe trade, and eight times higher in January 2021.

In its latest Sunday Spotlight, the consultancy analysed the latest capacity figures for December 2020 and January 2021 based on its Trade Capacity Outlook (TCO) database.



The analysis showed that the current transpacific market dynamics are governed by an extreme injection of capacity. In December, the transpacific trade is expected to see a capacity increase of 27.3 per cent year on year, clearly showing that the current market strength in terms of spot rates is not on account of carriers keeping transpacific capacity artificially low.



On Asia-Europe however, the carriers' deployment plans indicate a capacity growth of 6.7 per cent year on year in December, but it is lower than in November, and in the longer historical context, is not an exceptional increase.



'Interestingly, the spot rate developments on the Asia-Europe trade have been relatively subdued, compared to the record-setting levels on other deep-sea trade lanes, even when considering last week's +20 per cent Week-on-Week increase,' said CEO, Sea-Intelligence, Alan Murphy.



'As a consequence of the extremely strong demand boom in the transpacific, carriers have quite naturally diverted capacity onto the transpacific - both to capitalise on the much higher freight rates, but of course also to be able to physically move the large volumes suddenly requiring shipment.



'However, there is a finite number of vessels available, and suddenly re-routing this capacity means a lower capacity growth for Asia-Europe. If we are now poised to see a similar boom in demand on Asia-Europe, shippers on that trade are about to experience very tight capacity and sharply increasing rates in the coming weeks.'


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