Ocean container carriers will boost capacity between the Far East and the U.S. 14 percent in 2011 from last year, analysts Alphaliner say in a sharply more robust projection of available capacity than other industry forecasts.
The Paris-based firm's forecast is significantly higher than the 8.8 percent year-on-year capacity growth predicted by the Transpacific Stabilization Agreement, a carrier discussion group.
Cargo demand growth is expected to lag behind the increase in supply through the year, Alphaliner said.
By The Numbers: Container Rate Benchmark
This will result in weaker-than-expected utilization rates that will have a negative impact on carriers' attempts to raise freight rates for the 2011/12 season.
The trans-Pacific trade will see significant activity in the next three months as carriers prepare for a major influx of capacity ahead of the new trans-Pacific service contract season beginning in May.
Several new strings are expected to be launched from Asia to the U.S. starting in April as the trans-Pacific carriers anticipate demand on the eastbound trade to grow by 7 to 8 percent in 2011 following growth of more than 15 percent in 2010.
Alphaliner said the TSA's "optimistic" projections appear to be backed by the strong eastbound cargo volume from the Far East to the U.S., which grew 15.8 percent year on year in January, boosted partly by an earlier Chinese Lunar New Year.
"However, despite the strong volume growth, utilization levels remained well below last year's levels," Alphaliner said.
The TSA, which groups the 15 largest carriers on the trade, reported load factors of 88 percent to the U.S. West Coast and 95 percent to the East Coast -- in line with Alphaliner's estimate of an 89 percent overall utilization rate in January, down from 98 percent a year ago.
The lower load factor stemmed from a 25 percent increase in capacity in January and February compared with the same period in 2010, which was driven by the re-introduction of services and the entry of several new niche operators.
"The capacity growth trend will continue this year," Alphaliner said.
-- Contact Bruce Barnard at firstname.lastname@example.org.