May.24--Singapore-based shipping analyst sees continuing support for trans-Pacific trade in U.S. recovery
    Divergent demand growth rates between the trans-Pacific and Asia-Europe container shipping trades will emerge as the year progresses forcing carriers to take drastic action or risk losing the gains made so far this year, according to one Singapore-based analyst.
    Rahul Kapoor, Singapore-based shipping analyst at RS Platou Markets, said lines would be closely watching economic and market indicators in the next 3-4 weeks to see to what extent they need to, and can, shuffle vessel supply between the two major East-West trades or lay up more ships to balance supply once the peak season starts to subside in late summer/early fall.
    “Latest data confirms that weak European growth is a consistent drag on container import growth whereas economic recovery in the US is aiding imports,” he told JOC.
    “European demand is not only turning fragile, it might end up turning negative for the full year given what’s happening in Europe.
    “By comparison, US data is highly buoyant despite recent softness and is likely to stay supportive for imports.”
Carriers could face a major rates slump if they wait until later in the year to idle more ships, introduce even slower steaming or add more port calls. 
    “They risk losing the gains seen so far this year,” he said. “My idea of how it will pan out is carriers won’t wait until September to start laying up capacity again if PSS [Peak Season Surcharges] surcharges show signs of failing.
    “In an absence of true demand led recovery, container liners on the Asia-Europe trade will be hard pressed to control available capacity further or risk failure of upcoming peak season surcharges,” he said.
    “There’s also a limit to the cascading of the vessels on to the Transpacific, or other trades like Latin America, if carriers want to avoid destroying the only saving graces for the latter half of this year.”
    He said the actions of the big three carriers — MSC, Maersk Line and CMA CGM — would be the deciding factors in how lines act, with quarter one results confirming that a fight by lines for market share was no longer an option.
    “Smaller players breaking the ranks don’t deter me much, what is key is the action of top three players,” he said.

(Source:JOC)