Rate pressure expected on Med trades as added capacity undermines demand

CONTAINER shipping lines have been scrambling to add capacity through the launch of new services on the Far East-Mediterranean trades despite projected slack demand this year.

Shipping lines are expected to add 30,000 TEU of weekly capacity to the Far East-Mediterranean trade over the next three months, representing a growth of 25 per cent, according to Alphaliner.


"These capacity additions could jeopardise the rate restoration efforts of carriers planned from March 1, especially on services to the Mediterranean," said the Paris based maritime consultancy.


Over the same period, two of the Far East-north Europe strings will be removed, namely, the Maersk/CMA CGM AE-8/FAL 5. The last sailing was scheduled for January 22, plus UASC`s AEC 2 service, which makes its last sailing on February 13.


The report noted that Maersk Line is will launch a new high capacity Far East-Mediterranean loop, the AE-20 from on February 19. This will add 13,000 TEU weekly to the trade. It said that part of this capacity has been shifted from the Far East-North Europe loops that will cease to wayport in the Mediterranean region.


Later in March MSC and CMA CGM plan to jointly offer a new loop, the Falcon/FAL-9, with a weekly capacity of 9,500 TEU.


The G6 shipping lines, APL, Hapag-Lloyd, HMM, MOL, NYK and OOCL, are starting in April a new Loop 9, which will be dedicated to serving the Far East to East Mediterranean trade. It said that this new loop is forecast to add 6,500 TEU per week to the trade.


Furthermore, capacity is expected to be added to a number of existing loops over the next two months. Alphaliner said UASC and CSCL will deploy 6,900-8,000 TEU ships on their joint AMC1/AMX1 service to replace the existing 5,600-TEU vessels.


The three CKYH operated strings, MD1/MD2/MD3, are also expected to see capacity increases of about 10 per cent, the report added.