FREIGHT rates on the Asia-Mediterranean trade are under severe pressure with the Shanghai-Med segment of the Shanghai Containerised Freight Index collapsing to well below US$300 per TEU in June.
This, despite the fact that the trade lane links the manufacturing workshops of Asia with southern Europe's transshipment hubs, some of the busiest in the world with a weekly cargo capacity of 2.7 million TEU.
Only 11 of the 26 services are direct to the Mediterranean without going on to northern Europe or the US, according to Lloyd's List Containers.
Seventeen lines offer scheduled services on the trade, deploying 300 vessels. Mediterranean Shipping Co (MSC) is the largest single operator, with a weekly capacity of 49,254 TEU.
When paired with the 24,920 TEU of capacity from Maersk Line, the 2M alliance dominates the Asia-Mediterranean trade, with a combined weekly capacity of 74,174 TEU.
The CKYHE and Ocean Three shipping alliances follow 2M with 68,000 TEU of capacity each, and the G6 with a combined weekly capacity of just 31,757 TEU.
Vessels employed by the lines include some of the world's largest, with 15 mega containerships of over 16,000 TEU having 10 per cent of total capacity.
Last month Maersk and MSC made the surprise move of cutting capacity on the Asia-Mediterranean trade lane, citing weak demand, particularly for Black Sea imports to Russia.
The 2M partners plan to operate smaller ships in one of their loops, branded Condor by MSC and AE9 by Maersk. Instead of deploying 10 ships of 9,500 TEU capacity, the pair are to bring in 6,500 TEU vessels instead.
Figures from Container Trades Statistics show that volumes from Asia to Russian Black Sea ports shrank to 25,848 TEU in the first four months of this year, compared with 47,326 TEU in the same period of 2014. In April, volumes were down to 6,771 TEU from 12,931 TEU a year earlier.
Although, Maersk and MSC have been anticipating volume growth of three to four per cent in the Asia-Mediterranean trades this year, this has still not been achieved.
The Ocean Three alliance of CMA CGM, China Shipping and United Arab Shipping Co is also withdrawing capacity, in effect removing one Asia-Europe loop for at least three months. The trio cited lower volumes into much of Europe compared with last year, with Russian trade by far the weakest. The eastern Mediterranean trade has not only been hit by Russian sanctions but also by slowdowns in Turkey.
WORLD SHIPPING
26 July 2015 - 19:57
Rates still plunge on Asia-Med trade as shipping lines cut capacity
FREIGHT rates on the Asia-Mediterranean trade are under severe pressure with the Shanghai-Med segment of the Shanghai Containerised Freight Index collapsing to well below US$300 per TEU in June.
WORLD SHIPPING
26 July 2015 - 19:57
Rates still plunge on Asia-Med trade as shipping lines cut capacity
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