Sea-Intelligence: No sign of capacity reduction during Golden Week in China
The Danish research and consulting company Sea-Intelligence has commented on the capacity that shipping lines have planned to deploy/withdraw in the 4 weeks of Golden Week from week 40 to week 43 on trans-Pacific and Asia-Europe shipping routes.
Port of Shanghai, China
With China's Golden Week holiday about a month away, it's common for carriers to announce their entire cancellation plans in anticipation of slowing demand.
“Given the current market situation, it seems as if carriers will not follow historical patterns of Golden Week capacity deployment,” said Alan Murphy, CEO of Sea-Intelligence.
According to the current deployment schedule, the supply capacity on the Asia-North America West Coast service will be around 420,000-460,000TEU, while it has never previously surpassed 380,000TEU during 2014-2020.
In four weeks, 1.74 million TEUs are expected to be delivered, up 30.8% year-on-year, and compared with the 2014-2020 average of 3.9%.
“It seems that carriers are either anticipating no Golden Week slowdown in demand or that they are prepared to keep the increased levels of deployed capacity, in the hopes of clearing backlog from congested ports,” Murphy noted.
He added: “It is most likely a combination of the two, as this pattern was also seen during Chinese New Year 2021".
Furthermore, shipping lines will only draw 3.4% of deployed capacity during these four weeks in 2021, compared with an average reduction of 8.5% during 2014-2020.
On the Asia-North America East Coast service, deployed capacity will increase by 29.8% compared to an average of 8.7%.
In terms of capacity reductions, only 2.3% of the total four-week Golden Week capacity is expected to be canceled in 2021, compared with the 2014-2020 average of 9.8%.
"Demand growth on Asia-North Europe is not as extreme as on the Transpacific, and this is reflected a certain extent in the carriers’ scheduled deployment, as 12.0% of the total capacity across the four weeks is slated to be withdrawn, which is not too far off the 15.0% average", Murphy commented.
That shows, capacity growth over the same period is still very high at 23.8%.
Meanwhile, Asia-Mediterranean is the most stable route compared to the previous trend, with capacity reduction of 15.1% compared to the average of 17.2%.
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Source: Phaata.com (According to SeatradeMaritime)
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