Rates continue to slide as active fleet expands
Analyst says containership fleet has grown by 19% since the start of the year, while rates have started to slide
An increase in the size of the active containership fleet is starting to have an impact on freight rates, with averages prices out of China falling for the last two months.
According to analyst AXS Alphaliner, the active containership fleet has grown 19% over the last eight months, from 11.55 million teu at the start of the year to 13.8 million teu in August. And the extra capacity is causing rates to decline.
Alphaliner said: “The rapid increase in capacity deployed has finally started to have an impact on container freight levels, with average rates out of China sliding by 6% in the last two months.
“Carriers continue to add new capacity, with several new service introductions still to come in September, including two new transpacific and two transatlantic services.
“The additional capacity comes in as a weaker-than-expected peak season has led to declining utilisation levels.”
“Further rate declines are expected until the end of the year, with the benchmark Far East-Europe forward swap rates expected to fall a further 8% by early next year.”
All the major carriers, except for NYK, deployed additional tonnage during the period, with MSC leading the market in terms of teu increases – it has brought in an extra 282,000teu - while CSAV’s active fleet has grown the most in percentage terms – up 61%.
MSC is expected to receive up to 13 vessels of the 14,000 teu class this year, of which eight have already been delivered, based on Alphaliner records.
“MSC has been very active in adding chartered tonnage, taking advantage of low charter levels during the early part of this year,” Alphaliner said.
The Shanghai Containerised Freight Index shows that rates declined again last week, with the overall index for 15 routes from Shanghai declining 27.7 points, compared to the week before, to 1485.90.
Rates on services from Shanghai to Europe last week declined by US$24, compared to the week before, to reach $1,283 per teu, while rates to the US West Coast dropped $60 to reach $2,692 per feu.
Rate to the Mediterranean dropped $11 to $1,808 per teu and rates to the East Coast of the US were down $46 to $4,093 per feu.
According to analyst AXS Alphaliner, the active containership fleet has grown 19% over the last eight months, from 11.55 million teu at the start of the year to 13.8 million teu in August. And the extra capacity is causing rates to decline.
Alphaliner said: “The rapid increase in capacity deployed has finally started to have an impact on container freight levels, with average rates out of China sliding by 6% in the last two months.
“Carriers continue to add new capacity, with several new service introductions still to come in September, including two new transpacific and two transatlantic services.
“The additional capacity comes in as a weaker-than-expected peak season has led to declining utilisation levels.”
“Further rate declines are expected until the end of the year, with the benchmark Far East-Europe forward swap rates expected to fall a further 8% by early next year.”
All the major carriers, except for NYK, deployed additional tonnage during the period, with MSC leading the market in terms of teu increases – it has brought in an extra 282,000teu - while CSAV’s active fleet has grown the most in percentage terms – up 61%.
MSC is expected to receive up to 13 vessels of the 14,000 teu class this year, of which eight have already been delivered, based on Alphaliner records.
“MSC has been very active in adding chartered tonnage, taking advantage of low charter levels during the early part of this year,” Alphaliner said.
The Shanghai Containerised Freight Index shows that rates declined again last week, with the overall index for 15 routes from Shanghai declining 27.7 points, compared to the week before, to 1485.90.
Rates on services from Shanghai to Europe last week declined by US$24, compared to the week before, to reach $1,283 per teu, while rates to the US West Coast dropped $60 to reach $2,692 per feu.
Rate to the Mediterranean dropped $11 to $1,808 per teu and rates to the East Coast of the US were down $46 to $4,093 per feu.
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