The maintenance of capacity discipline is enabling container lines to enforce most of the rate hikes introduced since March, claims one leading Asia-based analyst.
However, the implementation of peak-season surcharges has not been successful and the delivery outlook for 2013 is casting a long shadow on rates.
Janet Lewis, head of industrial and transportation research in Asia at Macquarie Capital Securities, said the liner industry had “responded with remarkable sense” to declines in volumes on Asia-Europe lanes by reducing capacity and idling more vessels in recent weeks.
This has stopped spot rates on Asia-Europe and trans-Pacific routes from falling more than 10 percent from recent peaks, and has been offset on liner balance sheets by the 20 percent correction in bunker fuel prices. Weak volumes and new vessel deliveries however will limit lines’ success in collecting peak-season surcharges on the Asia-Europe and trans-Pacific trades at the start of August.
Newbuildings with capacity totaling 582,000 TEUs are still due to be delivered in 2012, the equivalent of about 3.6 percent of the global fleet, of which 194,000 TEUs are ULCSs and another 152,000 TEUs are in the 8,000 to 10,000 TEU capacity range.
“We are not hopeful of much of this peak season surcharge sticking,” Lewis said. “Rather, the risk is on the downside due to ongoing deliveries.”
“Being optimists, we currently project that rates hold through Q3 before coming under renewed pressure in Q4,” she said.
Further pressure could be applied on rates in 2013 when more than 1.6 million TEUs of new capacity are due to be delivered, of which more than 1 million constitute vessels in the ULCS and 8,000 to 10,000 TEU capacity classes. These additions would see the global fleet increase by approximately 15 percent between now and next July.
“This could create sufficient excess capacity to push rates lower again without meaningful capacity management by the global operators,” Lewis said.
Contact Mike King at firstname.lastname@example.org.