Drewry: Asia-Europe Carriers Need to Address Capacity

Drewry: Asia-Europe Carriers Need to Address Capacity

The deliveries of new ultra-large container ships that are scheduled later this year will further depress Asia-Europe freight rates unless carriers make more radical changes, Drewry Shipping Consultants said Monday.

With most of Europe still mired in recession, or close to it, westbound Asia-Europe container volumes fell 7.8 percent year-over-year in March and are averaging 5 percent lower than in the previous two quarters, Drewry said. As result, vessel utilization in March fell to a “poor” 64 percent.

Despite carrier efforts to limit capacity, westbound Asia-Europe vessel capacity in April was virtually the same as in March because fewer sailings were canceled.  

Only one service withdrawal between Asia and northern Europe has been announced. Evergreen, China Shipping and Zim Integrated Shipping Services will remove their CES 2/AEX 2 loop of nine fast vessels averaging 9,419 TEUs in June.

Carriers have postponed some deliveries, but they still have another 31 ships with capacities of more than 10,000 20-foot-equivalnt units due for delivery later this year, including the first five of Maersk Line’s 18,000-TEU ships.

On top of this, the news of China Shipping’s order for five new 18,400-TEU vessels “will also do little for market sentiment right now,” Drewry said.