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Carriers blank nearly half of all Asia – Middle East sailings

Consumers in the Middle East face slimmer choices in the shops as global liners shun the region in favour of the higher paying main east-west tradelanes.

New analysis from Alphaliner shows carriers have blanked up to 50% of dedicated Asia – Middle East sailings due to a lack of tonnage and vessel delays as well as the keenness to ensure other higher paying routes are better serviced.

Noticeably, Shanghai to Jebel Ali spot freight rates are the lowest of all the deepsea routes monitored by the Shanghai Containerized Freight Index (SCFI). The current rate of $4,000 per teu is a far cry from the $20,000 per feu being raked in by carriers on Shanghai to US west coast destinations at the moment.

Alphaliner analysis shows none of the seven dedicated Central China – Middle East services operated by the big carriers currently offers weekly sailings due to a chronic lack of tonnage.

Shanghai to Jebel Ali spot freight rates are the lowest of all the deepsea routes monitored by the SCFI

As of yesterday, Alphaliner counted just 29 ships deployed on these services, while 50 would be required according to pro forma schedules.

“The shortage of tonnage in the Far East – Middle East trade is not only the result of port congestion: many ships have been redeployed to the main East – West routes, where cargo demand is very strong and spot freight rates are at historical highs,” Alphaliner pointed out in its most recent weekly report.

The Asia – Red Sea trade is also affected. The Ocean Alliance operates two services jointly with Pacific International Lines (PIL). These loops require 17 ships, but are currently operated with only eight vessels, according to Alphaliner data.

Many other regional trades have been hit hard as global liners have focused more tonnage on the main east-west trades from Asia to North America and Europe – the biggest loser being Africa.

Splash reported last month Alphaliner analysis which showed that capacity deployed on liner services to and from Africa is 6.5% lower than a year ago.

Other routes such as intra-Asia and to Oceania and Latin America are also seeing less coverage this year too.

Olaf Merk, project manager for ports and shipping at the International Transport Forum (ITF) of the Organisation for Economic Co-operation and Development (OECD), questioned whether regulators ought to be looking into this shift in global coverage as well as the host of other issues carriers are accused of in recent months.

“This seems to have become the current reality of global liner shipping: alliances and consortia continuously shift capacities between tradelanes to adapt to changes in demand even if there are no real changes in demand,” Merk told Splash last month, adding: “And so it can happen that shippers in one continent suddenly have less capacity to their disposal due to a capacity shift to other parts of the world, even if they need more capacity. This dynamic – often coordinated via alliances and consortia – obviously can have impacts on freight rates.”

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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