The idle containership fleet has reached its highest level in five years, with over 1 Mteu of vessel capacity currently unemployed.
Carriers are removing capacity on most main tradelanes in response to weak market demand, with the Asia to Europe route witnessing some of the most drastic cuts.
Of the 21 strings operated by the four main carrier alliances in the Far East to North Europe trade, two have been withdrawn by the ‘Ocean 3’ and 2M partnerships.
The G6 and CKYHE meanwhile, are undertaking void sailing programs that will remove nine and five sailings respectively in November and December, effectively taking out one and a half strings each week during this period.
Despite the drastic capacity cuts, carriers have not been able to reverse the slump in freight rates as the latest GRI attempt in November has unravelled yet again.
Spot rates from Shanghai to North Europe have fallen to $409/teu last week according to the SCFI, with carriers failing to retain most of the rate gains from the 1 November GRI, which varied from $750 to $1,200 per teu.
Although the number of weekly sailings has been cut by some 3.8 strings in the fourth quarter, the effective capacity reduction on the Far East to North Europe route is only 1% lower than it was during the same quarter last year.
This figure takes into account the void sailing programs that were implemented last year, as well as the increased size of vessels deployed on the remaining strings. The average size of ships used on this trade is now close to 14,000 teu, compared to ‘only’ 12,000 teu a year ago.
Last year, for instance, there was just a single container liner service which offered a weekly capacity in excess of 17,000 teu, while currently there are four such strings on the Asia to Europe trade lane.