Subscribe to our free, weekly email newsletter!


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 Patrick Burnson, Executive Editor
August 06, 2012

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

image
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 .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Almost all companies today are aware of their labor or material costs... but what about energy consumption? It all comes down to having the energy data needed to determine what actions you must take to improve. The payoff is worth it, as insight into energy data allows you to make more valuable, relevant operating decisions.

With lower energy prices sparking domestic economic gains, coupled with solid manufacturing and industrial production activity, improving jobs numbers, and a GDP number that shows progress, there is, or there should be, much to be enthused about when it comes to the economy and the economic recovery, which has been raised and discussed and dissected from basically every angle possible, it seems. But that enthusiasm regarding the economy needs to be tempered, because big headline themes seldom tell the full story at all really.

The annualized turnover rate for large truckload carriers in the third quarter rose one percentage point to 97 percent, according to the ATA.

The Pacific Maritime Association (PMA), representing employers at 29 ports, and the International Longshore and Warehouse Union (ILWU), which represents 20,000 dockworkers, have come to a tentative agreement on a key issue in ongoing contract negotiations.

Diesel prices continued their ongoing decline, with the average price per gallon falling 6.7 cents to $2.866 per gallon, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).

Article Topics

News · Ocean Freight · Ocean Cargo · Trade · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA