Carriers serving the Asia-North Europe trade are cancelling sailings to shore up declining spot rates, reports container shipping research house Alphaliner.
The North Europe component of the Shanghai Containerised Freight Index (SCFI) slid a further 2.7 per cent to US$640 per TEU, and has fallen by 36 per cent since January.
Anecdotal reports to London's Loadstar suggest carriers are beginning to discount heavily to fill their ships.
"There was no immediate sign of light at the end of the tunnel" said one source.
Said Paris-based Alphaliner: "The rate decline happens as capacity increases on the trade continue to outpace demand growth."
The consultant said the Ocean Alliance would blank four sailings to North Europe early next month, while THE Alliance will take out three during the same period, between weeks 17 to 19.
According to Alphaliner's calculations, voided sailings will reduce trade capacity from 300,000 to 240,000 TEU during the period, but added that these capacity management measures would "not be sufficient to mitigate the capacity increase on the trade".
This, it said, had been prompted by an extra, seventh loop by the Ocean Alliance this month and the upsizing of a THE Alliance string.
As proof of market concern, Alphaliner reports that HMM has backed out of upgrading its standalone AEX service, which was due to start phasing in 6,300 to 6,700-TEU ships next month, adding up to 2,000 TEU in extra slots a week.
Source:HKSG Group
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