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Unmasking the extent of container shipping’s potential overcapacity

Analyst Alphaliner outlines the current capacity shortages in the trades between Asia and Europe and in doing so also reveals the extent of the potential overcapacity that could affect the industry if the Red Sea crisis is resolved.

Nick Savvides, Europe correspondent

May 16, 2024

2 Min Read
An overhead shot of containerships in port
Photo: AdobeStock

The broker’s weekly report shows a chart with the capacity required for the trades to Europe via the Suez Canal in May last year and comparing that to the requirements a year later and the actual vessels deployed, showing a shortfall of 36 ships.

“Despite the fact that already 1.14 million teu of new capacity has been delivered this year so far, the members of the three mega-alliances still lacked 36 ships to fully staff their 25 Asia – Europe loops as of Friday 10 May,” said Alphaliner.

However, should the Red Sea diversions end this month and Suez Canal transits resume, the carriers would have some 54 vessels, of an average size of 14,150 teu, to redeploy, a total of around 764,100 teu.

Stefan Verberckmoes, an analyst at Alphaliner told Seatrade Maritime News: “Indeed, there would be a large overcapacity if the Red Sea gets solved. However, this is not expected to happen soon. Carriers have finally restructured their networks with new rotations in view of the Cape routings.”

The analyst added that another 2 million teu will be delivered this year, “which will help to reduce the current 10% shortage on Asia-Europe. My analysis focused on the Far East – Europe trade only and the alliance services in particular.”

Verberckmoes also points out that extra tonnage is needed in services from India to Europe or from Asia to US East Coast, which will reduce the over-capacity equation, as will the 3% growth in volumes that is also expected.

Related:Red Sea crisis sees 2M separation go into reverse

“I hear from carriers that they expect a strong peak season, which means that the additional capacity is still more than welcome for time being,” added the analyst.

The current shortage of vessels in the trades, as of 10 May, 340 container ships were deployed in Asia–Europe services of the three main alliances, 36 short of the number needed for 25 loops, meaning that lines need to cancel 9.6% of all weekly sailings.

According to Alphaliner data the situation varies for each alliance, with the Ocean Alliance short of 20 ships, while 2M and THE Alliance both require an additional eight vessels.

2M, however, already operates 125 vessels compared to THE Alliance’s 110.

Vessel shortages for the European trades has already seen Maersk and MSC return to vessel sharing to help cope with the discrepancy in necessary capacity for the Cape diversions.

About the Author

Nick Savvides

Europe correspondent

Experienced journalist working online, in monthly magazines and daily news coverage. Nick Savvides began his journalistic career working as a freelance from his flat in central London, and has since worked in Athens, while also writing for some major publications including The Observer, The European, Daily Express and Thomson Reuters. 

Most recently Nick joined The Loadstar as the publication’s news editor to develop the profile of the publication, increase its readership and to build a team that will market, sell and report on supply chain issues and container shipping news. 

This was a similar brief to his time at ci-online, the online publication for Containerisation International and Container News. During his time at ci-online Nich developed a team of freelancers and full-time employees increasing its readership substantially. He then moved to International Freighting Weekly, a sister publication, IFW also focused on container shipping, rail and trucking and ports. Both publications were published by Informa. 

Following his spell at Informa Nick joined Reed’s chemical reporting team, ICIS, as the chemical tanker reporter. While at ICIS he also reported on the chemical industry and spent some time on the oil & gas desk. 

Nick has also worked for a time at Lloyd’s Register, which has an energy division, and his role was writing their technical magazine, before again becoming a journalist at The Naval Architect for the Royal Institution of Naval Architects. After eight successful years at RINA, he joined Fairplay, which published a fortnightly magazine and daily news on the website.

Nick's time at Fairplay saw him win the Seahorse Club Journalist of the Year and Feature Writer of the Year 2018 awards.

After Fairplay closed, Nick joined an online US start-up called FreightWaves. 

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