Lines form up in new battle for market share

The battle for market share on the Far East-North Europe service is set to heat up again after operators in the trade finalise routes and alliances.

Figures published by analyst Alphaliner show that the total weekly capacity deployed on the trade will increase to 284,000teu a week until the summer, up from 248,000teu currently.

“The Far East-North Europe partnership reshuffle of 2012 will see the most significant carrier realignment since 1996-1997, when the last major alliance restructuring took place,” said Alphaliner.

Last month, UASC confirmed that it would expand its co-operation with CSCL and CMA CGM on the trade from this month.

By the end of June, the new network configurations of the various carrier alliances should be fully implemented. Until then, weekly capacity on the trade is expected to rise by up to 14% above that available at the beginning of the year, and by up to 2.5%, year-on-year, said Alphaliner.

However, it believes carriers will try to avoid a potentially devastative rate war by removing some of the excess capacity by pulling out smaller loops and shifting some of the largest newbuildings of more than 10,000teu to secondary trades.

“This is illustrated by the planned assignment of several UASC 13,100teu newbuildings to a Far East-Middle East loop operated jointly with CSCL and CMA CGM. This would be the first time that ships of over 10,000teu were deployed on the loop,” said Alphaliner.

However, freight rates will remain under pressure, said the analyst, as demand growth is expected to weaken this year to only 1.5%.