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Ocean liners withdraw 1.3m TEU of capacity from Asia trades in Q1

CONTAINER shipping lines are expected to withdrawal a combined 1

04 February 2020 - 19:00

CONTAINER shipping lines are expected to withdrawal a combined 1.3 million TEU of capacity by voiding sailings on Asia to North America and Europe trade lanes this quarter.

Although blanked sailings announced thus far for the quarter generally appear to be related to the slowdown in business from Chinese New Year and do not appear to reflect a slowdown in business in China related to the coronavirus, further blanked sailings may surface because of the planned extension of the New Year holiday due to the virus, reported Hellenic Shipping News.



Given that carriers have been more aggressive this year in voiding sailings on the Asia-Europe trade, spot container rates from Shanghai to North Europe and the Mediterranean are higher than last year. However, spot container rates from Shanghai to North America are still substantially lower year on year.



As of January 23, compared to a year prior, Drewry's World Container Index shows spot container rates from Shanghai to Rotterdam stood at US$2,072 per FEU, up seven per cent; rates from Shanghai to Genoa totalled $2,672 per FEU, up 44 per cent; rates from Shanghai to Los Angeles were $1,588 per FEU, down 28 per cent; and rates from Shanghai to New York stood at $2,841 per FEU, down 16 per cent.



From Asia to North America 58 container shipping voyages are expected to be blanked in the first quarter of 2020, compared to just 43 in Q1 2019, which will result in a 26 per cent year-on-year increase in withdrawn TEU capacity from voided sailings. From North America back to Asia, 59 container-shipping voyages are expected to be blanked in Q1 2020, up from 39 in Q1 2019.



On the Asia to Europe trade, 58 voyages are expected to be withdrawn in Q1 2020, up from 25 in Q1 2019, which will result in a 123 per cent increase in removed capacity from blanked sailings. On the Europe to Asia trade, 49 voyages are anticipated to be shelved, up from 25 in Q1 2019.



The large variation in the eastbound and westbound withdrawn TEU capacity and blanked sailings on the Asia-Europe trade for Q1 2020 is due to many voyages from Asia to Europe being scrapped later in the quarter. These effects will be felt on the Europe to Asia trade into this second quarter.



On a week-by-week basis: On the Asia to east coast of North America trade, blanked sailings from Asia in Q1 2020 are primarily occurring in early February, while blanked sailings from ECNA back to Asia will be implemented in early-to-mid March.



This trend suggests these blanked sailings are mainly due to the Chinese New Year, which fell on January 25. The impact is always felt on the return leg back to Asia a few weeks later.



Meanwhile, on the Asia to west coast North America trade, blanked sailings from Asia are primarily taking place in early February, while blanked sailings from WCNA back to Asia are happening in late February and early March.



On the Asia-Europe trade, blanked sailings from Asia are mainly occurring in late January through the middle of February, while blanked sailings from Europe back to Asia are mainly occurring in early-to-mid March, although blanked sailings on both the eastbound and westbound routes are expected to remain in effect throughout the first quarter.



Alliance breakdown: Based on current data, the 2M Alliance is expected to withdraw the most capacity from blanked sailings on the Asia-ECNA trade in the first quarter, followed by the OCEAN Alliance and THE Alliance. However, the figure for the 2M Alliance includes two voyages (eastbound and westbound) in which the service is jointly operated with ZIM.



On the Asia-WCNA trade, the OCEAN Alliance and THE Alliance are expected to withdraw the most capacity from blanked sailings during the quarter. The figure for the 2M Alliance includes one voyage (eastbound and westbound) in which the service is jointly operated with ZIM.



The OCEAN Alliance and THE Alliance are also expected to withdrawal the most capacity on the Asia-Europe trade during the quarter.


WORLD SHIPPING

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