Overcapacity remains problem for ocean carriers

Utilization levels of vessels on the Transpacific route have averaged only 73 percent, given in good faith but without guarantee

By ·

Ocean cargo carriers are running out of options to hold down capacity, said analysts for Alphaliner.

At the start of 2012, MSC seemed poised to launch an additional Asia-Europe string with some of the 15 new ships of above 10,000 twenty-foot equivalent units (TEUs) that it was due to receive this year, noted Alphaliner, a Paris-based consultancy. 

MSC already had 40 ships of this size in its fleet at that time and would have enough ships to mount a five-string service by mid-2012. 13 of these ships have already been delivered so far this year but there are still no signs of any new string. Instead, MSC has taken some extraordinary steps to maintain the delicate supply-demand balance to avoid adding excess capacity in the Asia-Europe trade.

“Since April, it has stretched by one week the rotation of three of its four Far East-EU strings (Tiger, Silk and Dragon), from 11 weeks to 12 weeks, as it adopted Super Slow Steaming on these strings. A fourth string (Lion) remains on a 11 week rotation, for now,” said Stephen Fletcher, Alphaliner’s commercial director.

These four strings now deploy 47 units of 12,500 to 14,000 TEU. In 2008, these four strings used to employ only 38 units of 8,000 to 9,600 TEU. MSC has also sent successively five of its 11,600-13,000 TEU ships on the forty-foot equivalent units (FEUS) West Coast route during the past six months. A 12,500 teu ship was assigned to the Transpacific route for the first time in February, followed by further ships of 11,660-13,000 TEU.

“These ships are by far the largest ships deployed on this route,” said Fletcher. “However, based on data collated by Alphaliner, the utilization levels of these vessels on the Transpacific route have averaged only 73 percent, given in good faith but without guarantee.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Ocean Cargo · Ocean Freight · Trade · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...