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COPENHAGEN research house Sea-Intelligence says, the decline in spot rates is significantly more negative, than what can be explained by seasonality alone, reports St Petersburg's PortNews.
"This could be the result of an aggressive commercial price war between shipping lines, potentially due to the switch-over to the new alliances, a weakening of the supply/demand balance, or a combination of both," Sea Intelligence reports.
On Asia to North America East Coast, we see a smaller supply contraction of -3 per cent Y/Y before CNY and -4 per cent Y/Y after CNY. On Asia-Europe, the Y/Y capacity growth in the eight weeks prior to CNY was 9 per cent, while in the eight weeks following CNY, Y/Y capacity growth is a substantial 27 per cent.
Especially for Asia-Europe, it is clear that a highly significant capacity growth is a key parameter in explaining the current spot rate weakness. Spot rates to NAWC, however, started to drop later than to Europe, which makes sense, given that the high level of capacity injection also started later into NAWC than it did into Europe.
If the shipping lines are to be successful with the General Rate Increases they have already announced, they will have to blank more scheduled sailings. MSC has now announced blank sailings on some services on the Transpacific, but this is not (yet) being done by the other shipping lines.
https://www.shippingazette.com/news?news_id=9250400000255
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