SeaIntel: Asia-Europe Capacity to Rise Post-CNY

With the current vessel deployment schedule, Asia-North Europe and Asia-Mediterranean capacity are set to rise by 8.8% and 6.5% post-Chinese New Year period, respectively.

The year-on-year capacity growth is expected to be seen in the week 11-22 post-CNY, SeaIntel Maritime Analysis said, adding that the capacity injection “is not necessarily bad on its own,” if matched by a similar growth in demand.

While demand growth in Asia-Europe is not familiar for the coming 12 weeks, the fiscal year 2017 demand growth was a mere 3.7%, dropping to just 0.7% year-on-year in the fourth quarter.

“In this light, the current capacity projections do seem very optimistic,” SeaIntel informed.

If instead a more modest capacity growth of 5% year-on-year should be targeted, carriers would have to blank a combined 112,000 TEU over the 12-week period, or an average of 9,300 TEU per week. With an average vessel size of 15,100 TEU, this corresponds to the blanking of 7.4 average-sized sailings.

“While we do not see the same level of unprecedented capacity injection on Asia-Mediterranean as on the Asia-North Europe trade lane, at 6.5% year-on-year capacity growth, the average week 11-22 combined capacity in 2018 is still growing rather strongly.”

If a more modest capacity growth of 5% year-on-year should be targeted, carriers would have to blank a combined 25,000 TEU over the coming 12-week period, or an average of a little more than 2,000 TEU per week.

With an average vessel size of 11,200 TEU, this corresponds to the blanking of 2.2 average-sized sailings.

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