Carrier rate truce crumbling: Alphaliner

The capacity discipline and rate stability seen since Hanjin Shipping sought court protection just over a year ago is now being eroded with battle lines being drawn up among competing carriers for a freight rate war, Alphaliner warns in its most recent weekly report.

Analysts at Alphaliner note that it has taken a year to to fully clear out the tonnage of the defunct South Korean carrier. Only a single vessel formerly operated by Hanjin remains idle: the 1,647 teu Orion, owned by Alpha Ship.

“The rapid depletion of the idle fleet since April and continued deliveries of 14,000-21,000 teu ULCS have added over 1m teu to the active fleet since last September,” Alphaliner notes.

While strong cargo demand has kept fleet utilisation levels at above 90% on most headhaul routes this year, the onset of the slack winter season from October is expected to put pressure on freight rates, Alphaliner has warned.

“The rate truce that carriers have largely abided by since Hanjin’s sudden exit one year ago, now appears to be crumbling. Rate slashing just ahead of the October holidays in China points to further rate instability as carriers continue to jostle for market share,” the weekly report stated.

The Shanghai Containerised Freight Index (SCFI) has recorded six consecutive weeks of declines and, despite strong peak season demand, carriers in August and early September failed to push rate increases through, something Alphaliner described as a “clear sign” that rate cutting is starting to take hold once again.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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