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 - LM Editorial

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

The trend of rising weekly diesel prices remains intact, with the Department of Energy’s Energy Information Administration (EIA) reporting this week that the average price per gallon of diesel gasoline increased 1 cent to $2.914 per gallon.

When the United States House of Representatives last week voted extend current law and authorizes surface transportation programs through the end of July by a steep margin, it was widely expected that the United States Senate and follow their lead. That is exactly what happened on Friday, May 22, with the measures headed to President Obama to be signed into law.

For the month of April, Cass and Avondale found that truckload rates in April, which measures truckload linehaul rates paid during the month, were up 3.8 percent annually, while intermodal dropped 1.9 percent annually during the same period.

Following the Pacific Maritime Association (PMA) signing off on ratifying a new five-year contract with the International Longshore & Warehouse Union (ILWU) on May 20, the ILWU followed suite on May 22, saying that 82 percent of its longshore worker members voted to ratify the tentative contract agreement between the parties that was reached on February 22.

Straying from its typical seasonal trajectory, United States-bound waterborne shipments dipped from March to April, according to data recently issued by Panjiva, an online search engine with detailed information on global suppliers and manufacturers.

Article Topics

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

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA