Overcapacity on the Asia-Europe trade
Container line research firm, Alphaliner, tells FreightWaves that the reduction in the Asia-North Europe capacity by 2M will “be more than compensated by the planned capacity increase by its rivals.”
It can be seen that there is an awful lot of capacity about to come on stream in the Asia-Europe trade in the near future. While the front-haul for shipping to the Mediterranean is $1,989 per forty-foot unit, rates for the backhaul of ultra-large container ships from Europe to Asia at $359 per forty-foot unit are well below operating costs for running these ships.
More new built vessels in the pipeline to join the global container fleet
MSC has eight vessels of 23,000 twenty-foot equivalent unit (teu) on order that are due for delivery in the second half of 2019 and are likely destined for the Asia-North Europe route. Cosco Shipping has 12 vessels with a total capacity of 180,970 teu on order and which are due for delivery at the end of the year. They are due to be deployed in the Asia-North Europe route.
Taiwan-based Evergreen has ten ships on order, of which six are 20,388 teu capacity. Two of these 20,000-teu plus ships will be deployed on the Asia-North Europe service. Meanwhile, not to be outdone, back in September 2018, Hyundai Merchant Marine ordered twenty vessels of which 12 are 23,000 teu capacity. These vessels will be deployed in 2020 into the company’s Asia-North Europe service.