Ocean container carriers are significantly boosting cargo capacity on Asia-Europe shipping lanes for the first time in 18 months, threatening to reverse recent strong gains in freight rates.
New service launches will add around 22,000 20-foot equivalent units to the trade, representing around 7 percent of total capacity, according to Alphaliner, the Paris-based consultancy.
"This is the first major influx of capacity onto the Asia-Europe sector since the start of the financial crisis in September 2008," Alphaliner said.
The additional services will ease the capacity crunch on the Far East-Europe market, which the trade has faced since late December.
Equally, the extra cargo space could reverse the trend of rising freight rates since the fourth quarter of 2009, according to Alphaliner.
After rising for 13 consecutive weeks, freight rates have started to show signs of cooling and fell for the first time last week when the average cost of shipping a TEU from Shanghai to North Europe slipped $60 to $2,104.
Rates from Shanghai to North Europe have risen by 71 percent since October and are 55 percent higher for shipments to the Mediterranean.
Cargo volume on the westbound trade from Asia to Europe rose by 10.6 percent year-on-year in January, to 1.126 million TEUs, the highest monthly figure since September 2008, according to the latest traffic figures from carriers.
Alphaliner counted at least ten extra loadings on the route in January and February, amounting to a one off addition of 52,000 TEUs, to cope with a surge in cargo demand.
"If the strong demand growth is sustained over 2010, the overall trade growth figure could reach more than 10 percent for the year," Alphaliner said.
The Journal of Commerce Online
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