A quick digest of my Journal of Commerce column this week: Capacity is being pulled from the trans-Pacific but not Asia Europe.
While there is some disagreement, it seems most likely that Asia-Europe capacity will not be pulled, in part because the big carriers won’t be willing to lead the effort and if they don’t, the smaller lines won’t initiate at the risk of losing market share if others don’t follow.
The stalemate on Asia-Europe will keep rates low and losses high, and this as 2012 gets going after a very early, late January Chinese New Year, this could be the trigger that forces consolidation.
Possibilities: The three Japanese lines merging into one, as suggested in a Lloyd’s List article today. Or COSCO and China Shipping could merge, given that there is a wide disconnect between the volume that China represents (30 percent) and the market share of the two Chinese carriers combined (less than 8 percent).
In the bulk trades China has a stated goal of controlling 50 percent of the iron ore and other bulk commodities it imports by sea, so perhaps there is a similar goal for containers. Regardless, it does seem like structural change may be coming to this industry.