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Cascading tonnage hits North-South trades

Cascading tonnage hits North-South trades
North-South rates are "haemorrhaging" under the increased tonnage displaced from the major Asia-Europe trades, according to a Drewry report.

Rates for Asia to Australia, West Africa, South Africa, India and both the East and West coasts of South America all fell during the second quarter, with spot rates from Shanghai to Santos falling 51% between January and July.

Shanghai to Durban also fell 19%, Melbourne 32% and Shanghai to Lagos fell 6% over the same period.

The cause of the rate falls is rooted in the delivery Ultra Large Container Ships into the Asia-Europe trade; despite 14 newbuilds averaging 12,713 teu being delivered into existing Asia-North Europe schedules in the second quarter of 2013, capacity on the trade grew just 1.7% between the first and third quarters of this year as ships of around 10,000 teu were displaced onto other trades such as Asia-Mediterranean and the Transpacific.

Looking to the coming year, Drewry added, "Further alliance/consortia restructuring in North-South tradelanes appears inevitable, particularly as world fleet growth of just over 7% next year is again expected to significantly exceed cargo growth."