As China prepares for its week-long holiday from today through to 7 October, rates have fallen from August highs of over $1,400 per teu to as low as $650 per teu to attract volumes, which is well below break-even point for most lines, Alphaliner's figures show.
Another factor in maintaining current services is the upcoming 2M and Ocean Three alliances. Lines will likely look to protect their market shares until the introduction of the new networks, currently slated for the end of the year.
The significant orderbook of ultra large containerships (ULCs) means that lines are unable to remove strings as services prepare for the phasing-in of new ships over 14,000 teu.
With an average of just under four ships over 14,000 teu being delivered every month between October 2014 and December 2015 from Maersk Line, Evergreen, China Shipping Container Line (CSCL), United Arab Shipping Co (UASC,) Mediterranean Shipping Co (MSC), Kawasaki Kisen Kaisah (K Line) and Yang Ming Line, cascading is set to be a continuing problem for other trades.
The 60 ULCs joining the Asia-Europe trades will displace existing ships of 8,000 to 13,000 teu that currently service those routes. According to DNV GL ULCs represent 40% of the orderbook capacity.
The cascading of those ships onto East Med, Middle East, transpacific and Latin America trades will have an effect that is only worsened by the 90 newbuilds in the same size range due for delivery before December 2015, according to Alphaliner's figures.
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