Expect to see more combinations of different ocean services during the next year as carriers create more alliances and consortia to head off the glut of capacity scheduled for delivery.
Drewry Supply Chain Advisors said the planned merger of the schedules of the Grand Alliance and the New World Alliance between Asia and the East Coast of North America in May is “most probably just the beginning of much greater integration, and its consequences should not be ignored.”
There are another 47 vessels with capacities of more than 10,000 20-foot-equivalent units still scheduled to be delivered in 2013, most of which will be deployed in the Asia to northern Europe trade lane, as the Asia-to-Mediterranean trade lane is already hopelessly overtonnaged, Drewry said in its Logistics Executive Briefing.
This could result in a 9.8 percent increase in effective capacity, although this may be reduced through further slow-steaming and temporary sailing cancellations.
As a consequence, a possible 49 vessels averaging 8,123 TEUs will need to be cascaded out into other trade lanes, according to Drewry’s calculations.
The Grand Alliance and New World Alliance could cascade 10 of these vessels. Since their services between Asia and Europe were merged into the G6 alliance just over a year ago, alliance members have only taken delivery of 10 vessels of more than 10,000 TEUs, but another 17 ultra-large container vessels averaging 13,354 TEUs are scheduled for delivery this year.
It is not yet known where the displaced vessels will be deployed, but Drewry said a strong possibility could be between Asia and the East Coast of North America. The Grand Alliance currently offers four weekly services on the route, and the New World Alliance has three. Each includes one loop via Suez, with the remainder passing through the Panama Canal.
The G6 Alliance has already said that its seven strings are to be reduced to six, so the most logical merger would be the two that pass through Suez, because of the size restrictions of the Panama Canal.
Drewry said the two alliances could merge the Grand Alliance’s AEX service to and from South Asia and the New World Alliance’s SZX service to and from Southeast Asia to provide a home for the 10 vessels cascaded out of the Asia-northern Europe trade lane.
If competing lines follow this model and combine their 39 strings, service options will be reduced for shippers, raising potential antitrust infringements. “Shippers will see their loyalty to ocean carriers sharing the same vessels tested even more. And the market shares of the new alliances may become a problem, particularly to and from Europe where a 30 percent ceiling is imposed by the European Union consortia regulations,” Drewry said.