International Maritime
Rerouting 28 Asia – Europe loops around Africa is costing carriers $ 12 million to $ 20 million per day . Shutterstock . com
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The source said carriers will likely try to move capacity from the trans-Atlantic to the Asia – Europe and trans-Pacific trades where rate levels are more profitable , a view Heaney supports .
“ Given there is more capacity than needed in this trade , it would make sense to deploy some of it to cater for Suez-related trades that require additional ships ,” he said . “ If they do this , they could expect higher trans-Atlantic
“ There is enough space on the trans-Atlantic and no equipment issues , so there is no way to raise rates .”
utilization and subsequently be more likely to achieve success with any trans-Atlantic rate increases .”
Drewry ’ s load factor data for November shows vessels on the head-haul westbound lane were only two-thirds full , with carriers slow to withdraw capacity and at nowhere near the volume required to move the pricing needle .
There are signs that capacity shifts are starting . 2M Alliance partners Maersk and MSC are adding extra vessels to services between Asia and the US East Coast to counter container imbalances emerging from the rerouting of ships around southern Africa .
While the lack of blank sailings is surprising in the oversupplied trade lane , the delay on surcharges adds to the puzzling nature of the carriers ’ trans-Atlantic strategies considering expected equipment shortages up to Chinese New Year on Feb . 10 and even beyond as vessels divert around the Cape of Good Hope in southern Africa .
Most container ships have been rerouted to avoid the Red Sea , adding up to two weeks to transit times that will impact empty container availability in Europe for the trans-Atlantic trade lane .
There is also a significant cost implication for the carriers when the added time in operating expenditure is combined with increased bunker costs . Rerouting the 28 weekly Asia – Europe services around the southern tip of Africa is costing carriers a combined $ 12 million to $ 20 million per day , according to an estimate by Sea- Intelligence Maritime Analysis .
However , the Red Sea attacks have raised spot rates to highly profitable levels on the Asia – Europe trade while the trans-Pacific spot market has taken off at the start of 2024 , so it appears carriers are willing to shoulder trans-Atlantic losses while they focus attention on the two more lucrative trade lanes .
email : greg . knowler @ spglobal . com
February 12 , 2024 | Journal of Commerce 17