Persistent capacity problems from Asia

6 June 2017

By: our colleague, Albert

The stability that had been expected from the formation of new alliances is set to continue. How does this happen, what are the consequences and what can you do to minimize the inconvenience? Our colleague Albert explains.

The politics of the new alliances on Westbound trade

As part of an ongoing effort to increase sea freight rates, space remains limited on sailing routes to Europe. Volumes remain stable and with the busy season in sight, pressure on capacity is set to increase again.

In the first weeks of April it became clear that every alliance has an interest in affiliated shipping companies at terminals, transhipment ports and depots. They have volume agreements with them. The sailing routes of the shipping companies are changed with the new alliances, but not each individual agreement.

These agreements have resulted in, among other things, delays in loading ports, transhipment ports and last-minute changes to shipping schedules. Two months after the start of alliances, the situation seems to be improving. However, the pressure on capacity remains.

Air freight profiting

As a result of the ongoing capacity issues, a portion of freight from Asia to Europe has shifted to other modes of transport. In particular, air and rail transportation from China have profited from this. Air freight has seen the best March figures since the crisis years of 2009 and 2010, with a growth of almost 15% relative to last year.

Planning is essential

Despite all the hope for stability, the question of capacity remains. For the time being, shipping companies seem to do everything possible to prevent a balance from occurring and are keeping the pressure on tariffs high. Planning well in advance and delivering correct cargo data timely, will play an ever-increasing role in the demand for space. Many shipping companies want to decide per week, per port, how much space they will sell and for what rate.

Questions

Have you any questions having read this article? Then contact us, we are ready to help.