Non-alliance capacity fades from trades

In a recent analysis, Sea-Intelligence noted a doubling of non-alliance carrier share on the Asia-North America West Coast route which has since fallen as freight rates decline.

The growth in non-alliance services was due to small, opportunistic carriers deploying capacity in the high freight rate environment, as well as large carriers deploying tonnage outside of network agreements, said Sea-Intelligence.

“But as the freight rates began to drop in 2022, the share of non-alliance services also began to decline, and looking into 2023-Q1, they are poised to continue to decline. There is still more relative capacity operated by non-alliance services than before the pandemic, but if the rate of decline continues, this will revert back to pre-Covid levels before the end of 2023,” said Alan Murphy, CEO, Sea-Intelligence.

For the Asia-North America East Coast, non-alliance capacity similarly rose in the immediate aftermath of the pandemic, but the decline does not point to a return to pre-pandemic levels.

“On the Asia-Europe trades, the non-alliance capacity has increased, but not materially, with no ability to handle material volumes as the figure is around 2%-5%. However, on Asia-Mediterranean, there are no signs of non-alliance services reducing their market share in 2023-Q1,” said Murphy.

Sea-Intelligence previously said that the tight capacity situation in 2021 and early 2022 significantly reduced the barriers for entry to the container market, enabling newcomers to join when the market was hot and exit when it cooled.

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Non-alliance capacity fades from transpacific trades