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Over aggressive capacity cuts, but rates still rising

Service demand has increased, 7.2% year-on-year on the Transpacific trade routes, but the reinstatement of capacity into the trade is less about demand and more a consequence of overly aggressive capacity cuts according to consultants Sea-Intelligence.

The Alliance is the prime culprit with 22 of the 30 un-blanked services in the third quarter belonging to the carrier consortium. Similar ratios on the Asia to North Europe services show that nine of 11 reinstated services were THE Alliance loops.

However, Hapag-Lloyd, a The Alliance member operator, has announced further rate increases in the Asia to Europe trades even with some capacity being brought back into service.

“Of the total 49 sailings that were un-blanked on Transpacific and Asia-Europe, THE Alliance has contributed to 36, which is nearly three quarters. This goes to show that THE Alliance blanked capacity too aggressively and have dialled it down keeping in line with the other alliances,” suggested Sea-Intelligence.

Pacific capacity has now transcended the space available in 2019, putting the trade into a year-on-year “growth phase,” said the consultancy. In addition, with virtually no cancelled services from week 29, except a few in week 36 the capacity expansion is either due to vessel operators no longer seeing Covid-19 as a major problem, or that demand is expected to develop over the coming weeks.

Capacity on the Asia to North Europe trades is on a par with 2019 levels, though Sea-Intelligence said that there could be a decline in capacity for Golden Week, which is normally announced between four and six weeks before the event, which is normally around the 1 October.

Even so, Hapag-Lloyd has announced further rate increases on the Asia to Europe services from 15 August, until further notice.

Hapag-Lloyd’s ocean tariff rates from East Asia (Excluding Japan) will be as follows:

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