With so much idle capacity and arriving newbuilds, container lines will be fighting over each other to deploy ships in areas where business is good.
Freight rates on the Asia-Europe trade have been rising steadily in the past few months as demand overtakes the supply of container slots.
The space shortage is artificial and a result of ships in lay-up, but even so, rising revenue in the box shipping business has been a rarity in the last couple of years.
In the first quarter, imports into Europe from Asia soared past 20 percent year-on-year, with exports growing even faster. Comparisons with last year are bound to be positive, but the fast rising imports are leading to some major service moves, none bigger than a joint Maersk-CMA CGM venture that kicks off in June.
The two giant carriers will eventually deploy 10 13,000 TEU ships on the Asia-Europe trade, with each line providing five vessels.
The new service will coincide with the start of the peak season, and will be seeking to capture the fast growing imports into Northern Europe.
But significantly, the mega container ships will be sliding into service directly from the shipyards, easing the digestion worries of line managers who must have been losing sleep thinking of ways to keep the huge vessels out of lay-up.
By the end of the year, all 10 will be slow steaming their way between Asia and Europe, full of lovely revenue-earning boxes.
At least that’s the plan.
In the modern world of container shipping, however, it doesn’t take much to start a stampede. Especially when a certain Geneva-based shipping company is expecting the delivery of a whole bunch of giant vessels – 31 of 13,000 TEUs, according to PR News Service.
The vessels will be delivered to MSC this year and the next and the only home for them will be on the Asia-Europe trade. What that will do to the rising freight rates is what text messaging did to teenage speech – stop it in its tracks.
It is difficult to see how rates can withstand an injection of so much tonnage. It takes a lot to fill a ship of that size and having such large vessels making regular calls at the Asian gateways can only end in overcapacity.
But maybe we are just drinking from the half empty side of the glass. Maybe European consumers will work themselves into a frenzy of spending and China’s exports will continue to fill all available shipping capacity.
We certainly hope so. Happy carriers are reasonable carriers, and if business is good shippers may see an end to highly volatile freight rates and a weekly stream of GRIs and surcharges that have made dealing with lines such an annoyance.