BWR: G6 Alliance increases Asia-Med capacity

Member carriers of the G6 Alliance have started the process of increasing average vessel size on the EUM/MED service by 16.1 percent, according to ocean carrier schedule and capacity database BlueWater Reporting.    The ocean carrier members of the G6 Alliance are increasing capacity in the trade between Asia and the Mediterranean, according to ocean carrier schedule and capacity database BlueWater Reporting.
   G6 carriers Hapag-Lloyd, APL, HMM, MOL, OOCL and NYK have begun the process of deploying larger ships on its EUM/MED loop, which makes stops in South Korea, China, Southeast Asia and the Middle East en route to Mediterranean ports.
   According BlueWater Reporting, the EUM/MED service previously operated with ten vessels – six from APL, two from MOL, and one each from Hapag-Lloyd and HMM – with an average capacity of 10,584 TEUs. Three of those ships have already been replaced with larger ones, and once the changes are complete, average vessel capacity on the service will increase 16.1 percent to 12,287 TEUs. HMM will provide a total of six of the vessels, while APL will provide three and OOCL one.
   The EUM/MED has a full port rotation of Busan, Shanghai, Ningbo, Shekou, Hong Kong, Singapore, Jeddah, Port Said, Genoa, Marseilles-Fos, Barcelona, Valencia, Port Said, Jeddah, Singapore, Hong Kong and Busan.
    As illustrated by the charts below, the changes will have little effect on carrier alliance market share in the trade. Prior to the changes, G6 carriers deployed 20,158 TEUs per week in the westbound lane from Asia to the Mediterranean, equal to 8 percent of the total market by nominal weekly capacity.


Source: BlueWater Reporting


Source: BlueWater Reporting

   With the additional projected 1,703 TEUs of weekly deployed capacity, the G6 Alliance will increase its market share to 9 percent, but will remain a distant fourth place to the 2M (89,560 TEUs), CKYHE (75,486 TEUs) and Ocean3 (56,099 TEUs) vessel sharing agreements. Non-alliance lines will sport just 3 percent of the total deployed capacity in the trade at 8,698 TEUs per week as most carriers not affiliated with a major VSA have exited the trade entirely save for a few slot exchange agreements.
   The trend toward deploying larger vessels in the Asia-Med trade, however, could be a risky move for carriers. The container market has been suffering from an oversupply of capacity and weak global trade growth, which have combined to push freight rates to historic lows.
   Rates have recovered more quickly on the trade between Asia and the Mediterranean than its North Europe counterpart, but took a beating in the past week. Average prices as measured by the Shanghai Containerized Freight Index since last Friday tumbled 20.3 percent from Shanghai to the Mediterranean, from $951 per TEU to $758 per TEU, while dropping 16.7 percent, from $932 per TEU to $776 per TEU, from Shanghai to Northwest Europe.
   The EUM/MED service will be the sixth dedicated string between Asia and the Mediterranean to deploy vessels in the 13,000-TEU range. But without sufficient demand to fill the larger vessels being delivered and cascaded from the Asia-North Europe trade, these increases in capacity could serve to push rates down even further.