Super large vessels cause 'chaos on the high seas'

Services are being cut on many

of the world’s major trade

routes as shipping lines struggle

to fill the new generation of

super large container vessels.

“We are seeing complete

chaos on the high seas in terms

of the amount of capacity

available and the level of spot

freight rates,” says Ben Hackett

of Hackett Associates.

“One has to wonder why

carriers cannot match supply

to demand. The end result

will likely be a highly volatile

situation of freight rates moving

up and down.”

He was commenting on lines

having to cut freight rates to the

United States despite the fact

that volumes were up on 2014.

Imported cargo volumes at

major US retail container ports

is expected to increase 3.6% in

August 2015 compared to the

same time last year, according

to the monthly Global Port

Tracker report released by the

US National Retail Federation

and Hackett Associates.

It is expected services will

be cut in order to raise rates

by reducing capacity, as has

happened over the past few

months on the Asia-Europe

trade.

Earlier in August rates for

twenty-foot equivalent units

from Asia to Europe stood

at a loss-making US$640,

according to the Shanghai

Containerised Freight Index.

The only way to stop the

Asia-Europe rate war is to

make drastic and permanent

capacity cuts, as the widespread

practice of voiding sailings

has proved ineffective in

slowing tumbling freight rates,

according to market analyst

Alphaliner.

According to their research,

carriers cancelled 52 voyages, or

10% of all Asia-North Europe

sailings during the first six

months of this year.

It is the highest rate of sailing

cancellations ever recorded on

the trade.

Pressure will remain on

rates as some 25 new ships of

between 13 800 and

19 000 TEU are still due to join

the Asia-Europe trade in the

coming six months.