Ocean carriers’ plans to get rid of surplus 8,000 teu vessels by dumping them into the Asia – East Coast of S. America tradelane appears to have seriously backfired.
The recent launching of MSC’s new Ipanema service in the middle of April, and the subsequent announcement of the deployment of much bigger 8,000 teu vessels by others, will result in a massive 33% increase in capacity between April and July, considers Drewry in its 'Container Insights Weeklly'.
Even before all of the plans have been implemented, they have triggered a rate war, with spot prices from Shanghai to Santos collapsing by 26% between April and May, down to $2,810/40ft (including THCs at both ends), according to Drewry’s Container Freight Rate Insight.
Anecdotal evidence indicates that since the middle of April, the decline was even higher, and rates were still dropping in the first week of June, indicating that no one wants to be muscled out of market share peacefully.
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