Alphaliner: FE-ECSA Rates Hit Rock Bottom

Poor market conditions have prompted freight rates in the Far East to East Coast South America (FE – ECSA) trade to fall by 90% over the past twelve months, eroded by weak demand and low capacity utilisation, Alphaliner says.

Rates were slashed from over USD 1,000 per TEU, recorded in January 2015, to today’s record low of only USD 113 per TEU from Shanghai to Santos, according to the latest SCFI assessment from 5 February.

The lowest rates in the market have reportedly dropped below USD 50 per TEU, as capacity utilisation averaged only 70% in January with no pre-holiday rush before the Lunar New Year.

“These rock bottom rates are forcing Maersk Line, MSC and MOL to rationalise their Far East – ECSA offering by merging two loops into a single service, effective mid-February. This rationalisation move follows last year’s decision by PIL, K Line, HMM and Yang Ming to shut down their joint SSA/AESAL/NHX/SA1 loop in October,” Alphaliner explained.

Combined, the closure of these two services sees FE – ECSA weekly capacity cut by about 23%, compared to September 2015. Following the latest rationalisation exercise, only four weekly strings will be retained on the FE – ECSA route. These provide an overall weekly capacity of only 35,000 teu – the lowest offering recorded on this trade since 2009. Despite the rather massive capacity reduction, continued weak demand on the sector will make carriers’ efforts to raise freight rates to a more sustainable level rather challenging.

As a result, Alphaliner expects the average size of vessels deployed on the four remaining FE – ECSA services to soon reach 8,800 teu, a remarkable jump of over 100% since 2009.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Nov 2019 >>
MTWTFSS
28 29 30 31 1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 1

Maritime Reconnaissance and Surveillance Technology

As varied threats in the Mediterranean Sea continue to proliferate, the need to advance…

read more >

CrewConnect Global 2019

CrewConnect Global is the leading forum for collaboration to advance new industry approaches to seafarer recruitment and training.

read more >

CruiseConnect Global 2019

Attend CrewConnect Global and stay on for the CruiseConnect Summit to take part in an industry-wide conversation focused…

read more >

CWC World LNG Summit & Awards Evening

The CWC World LNG Summit & Awards Evening will be returning to Rome in 2019 to celebrate it’s 20th year.

read more >