Drewry seems to be sceptical as to the development of the capacity and freight rates.  Read here:





The Asia-North Europe trade faces a “huge” impact from the influx of more than 50 ultra-large container vessels over the next 15 months, matching that of the formation of new carrier alliances, according to Drewry shipping consultants.

The deployment of an estimated 54 new ships of at least 10,000 TEUs capacity through December 2015 may help carriers achieve much-needed lower slot costs, the London-based consultancy said.

But at the same time, this could alter the supply-demand dynamics, hitting spot freight rates, and affecting other trades as carriers “cascade” vessels from the Asia-Europe route and altering the competitive balance between the alliances themselves.

“The major carriers are running a fine line at the moment between deploying their largest assets to cut costs and ruining the dynamics of their most important trade lane,” Drewry warned.

While westbound traffic out of Asia has exceeded forecasts this year, carriers have failed to stem the erosion of freight rates that have plunged more than 50 percent since early August.

While carriers haven’t yet decided on deployment patterns, the vessels scheduled for delivery will boost weekly westbound nominal capacity by an estimated 12.8 percent by end-2015, significantly above any anticipated cargo growth.

Carriers will come under “huge” pressure to fill additional slots on their ultra-large vessels as slot costs are usually realized at load factors above 90 percent.

The cascade of larger ships form the Asia-North Europe trade has already affected some of the north-south routes. There are now nearly 40 vessels of at least 10,000 TEUs previously deployed in the trade that are operating on the trans-Pacific route, “and of late, it is clear that some U.S. ports have struggled to cope with the additional numbers of containers being discharged.”

Drewry estimates some 61 ships of between 8,000 TEUs and 11,000 TEUs will be cascaded in the next 15 months, most likely onto the Asia-U.S. West Coast, Asia-Mediterranean and Latin America routes, and possibly Asia-Middle East.

The delivery of more than 50 ultra-large vessels is a “double-whammy” for the carrier alliances, Drewry concludes. “Lower spot costs are a positive, but they will struggle to cope with the additional capacity in the Asia-North Europe trade and the 60 ships that will be cascaded elsewhere are a risk for the stability of other routes.”