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).


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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

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