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The new alliance networks will offer faster transit times between Asia and North Europe’s major hubs, but only at the expense of extended voyage times to secondary ports, according to new analysis from Drewry Maritime Advisors.
Drewry’s analysis of the pro-forma schedules published by the 2M+HMM, Ocean and THE alliances for 1 April concludes that the vessel-sharing groups have “tried to impress shippers” with faster transits on main routes.
For example, the 12 weekly calls from Shanghai to Rotterdam by the three alliances will see the average transit time reduced from 34.8 days to 31.1.
However, said Drewry: “The new alliance structure is skewed in favour of the main corridors in the Asia to North Europe trade, which makes perfect sense for carriers seeking the big volume business.”
And it added that “shippers along these routes will get the best transit times”, but “the reverse will be true for niche shippers”.
There are 372 specific port pair options between Asia and North Europe from 1 April and, with 43, the Ocean Alliance has the highest number of fastest port-pair transit times, with THE Alliance on 35 and 2M with 26.
However, the improved transit times will not mean ships will go faster. Instead, the vessels will achieve quicker transits to the main hubs of Rotterdam, Antwerp and Hamburg by making them the first inbound calls on the voyage, at the expense of smaller ports.
Interestingly however, the Drewry data also reveals that 2M ships will be required to steam at slightly higher speeds to achieve their schedules, given that the vessels will average 16 port calls per round trip against the 14.3 for the Ocean Alliance and 12.4 calls by THE Alliance.
There will also be additional capacity offered by the alliances, mainly as the result of the 2M’s added string and its upsizing of ships. Drewry said this “would inevitably put some downward pressure on freight rates in the trade”.
And with marketing in Asia now in full swing for April sailings, spot rates on the route have been on the slide.
On Thursday, Drewry’s World Container Index (WCI) reading for Shanghai to Rotterdam had declined to $1,580 per 40ft, from $1,643 the previous week, and down from mid-January’s high of $2,212.
And the spot rate erosion on the Shanghai Containerized Freight Index (SCFI) continued last week, with Asia-North Europe falling for the third consecutive week. It was down $40 to $819 per teu.
However, spot rates on the trade are still four times higher than a year ago, when they fell through the $200 level, resulting in widespread losses.
And it seems container lines have been successful in securing significant increases in contract rates on the route, which were negotiated at the peak of the spot rate spike.
Last week, container freight rate benchmarking platform Xeneta reported a massive 64% hike in long-term contract rates between Chinese main ports and North European hubs, based on more than 1,500 rate data points recorded in its system by its shipper clients.
Drewry said it believed that a reluctance by the alliances to publish the full picture of their ship deployment earlier in the year was connected to these contract negotiations – “not wanting to publish the extent of the capacity increase, particularly during the commercially sensitive annual contracting season”.