From the second half of 2017 to the second half 2018, there will be a 11.5% capacity injection, data from the intelligence provider in the container shipping industry shows. Comparing the second half of 2019 with the second half of 2017, 2M alliance between Marsk Line and MSC will only experience a 3.2% growth in deployed capacity, whereas
*THE Alliance will experience a growth of 11.9% in their deployed capacity.
*Ocean Alliance will see a significantly higher capacity increase of 24.6%, SeaIntel added.
“With the most realistic scenario of a 5% growth in demand, we find it unlikely that the Asia-Europe trade will be able to absorb this additional capacity without the need to reduce the number of weekly services. Given our calculation, one service should already have been permanently closed in 2017,” the intelligence provider commented.As explained, the required capacity reduction is more likely to happen through blank sailings. In the fourth quarter of 2017, there will be a weekly excess capacity of 28,300 TEU that will need to be blanked, corresponding to 2.2 services on average per week to maintain supply demand balance.
By the second half of 2018, however, maintaining market balance would require the de facto closure of a weekly service by each of the three alliances, with the option of re-introducing a single new service in 2019 as the delivery of large vessels tapers off – which might not happen if the potential new order of 22,000 TEU vessels by CMA CGM is confirmed.
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