Overall capacity in the major east-west trades increased across the board in the second quarter of 2014 compared to the first quarter.
The newly formed CKYHE Alliance made its presence felt in the eastbound transpacific and westbound Asia-North Europe trade lanes, surpassing its closest competitor, the G6 Alliance, in market share. The member carriers of the recently rejected P3 continue to fight for their share as single entities, according to the latest quarterly "World Liner Supply Report" from BlueWater Reporting.
Capacity rebounded after falling for two straight quarters in the eastbound transpacific lane. An estimated 269,616 TEUs was allocated to the trade on a weekly basis by the end of Q2 2014, up 39,989 TEUs (more than 17.4 percent) from the 229,627 TEUs measured at the end of Q1 and 247,342 TEUs in at the end of the Q4 2013. This result surpassed even the recent high of 264,976 weekly TEUs in Q3 2013. This overall increase in capacity meant that the major competitive carrier groups all increased their own weekly allocated capacity in the trade, with the exception of Maersk Line.
Not all of them, however, increased their market share in the process. The market share of the G6 Alliance, for example, fell from 37.74 percent to 35.39 percent, despite the fact that the member carriers increased their combined estimated weekly allocated capacity from 85,747 TEUs at the end of Q1 to 95,404 TEUs at the end of Q2. As a result, the group lost its top spot in the trade in terms of market share by weekly allocated capacity to the emerging CKYHE Alliance, which increased its market share from 35.44 percent to 36.72 percent thanks to an increase in estimated weekly allocated capacity to 99,006 TEUs from 81,391 TEUs since the end of Q1. Industry leader Maersk Line lost market share as well, falling from 7.98 percent to 4.35 percent, as the carrier decreased weekly allocated capacity in the trade from 18,319 TEUs at the end of Q1 to 11,717 TEUs at the end of Q2, a difference of 36 percent. Maersk’s former P3 partner CMA CGM, on the other hand, increased its market share to 6.82 at the end of Q2, up from 3.54 percent at the end of Q1, as the carrier more than doubled its weekly allocated capacity in the trade, increasing capacity from 8,140 TEUs to 18,380 TEUs. Mediterranean Shipping Co., which was to be the third member of the P3, remained steady in the eastbound transpacific, increasing market share only slightly from 7.16 percent to 7.6 percent. Similarly, the remaining non-alliance carriers increased their combined market share in the trade from 8.53 percent to 9.13 percent, which may not seem like much, but is still noteworthy in that these carriers are essentially being forced out of the major east-west trades by their much larger competitors.
In the Asia-North Europe westbound trade, overall capacity increased for the second straight quarter. At the end of Q1, there were an estimated 207,258 TEUs of weekly allocated capacity in the trade, already up slightly from 205,370 TEUs the previous quarter. Since then, weekly allocated capacity from Asia to Europe has risen to 227,327 TEUs, an increase of nearly 10 percent. In terms of market share, the CKHYE Alliance has taken the lead here as well, with 25.90 percent, up from 23.61 percent at the end of Q1, but the alliance is still followed closely by the G6 Alliance, which increased its share of the market from 24.45 percent to 25.06 percent. Maersk isn’t much further behind, controlling 20.58 percent, up slightly from 20.16 percent at the end of Q1. MSC and CMA CGM both lost some market share, though CMA CGM took the worst of it, falling 2.6 percent, from 10.95 percent at the end of Q1 to 8.35 percent at the end of Q2. MSC only dropped from 11.38 percent to 10.79 percent in that same period. Non-alliance lines held relatively steady in the Asia-Europe westbound trade as well, with their combined market share at 9.33 percent at the end of Q2, down only 0.12 percent from the end of Q1.
Even the westbound transatlantic, which had been the most consistent of the three major east-west trades in the past year, saw a significant increase in terms of weekly allocated capacity. Carriers increased overall weekly allocated capacity in the trade from 59,527 TEUs at the end of Q1 to 68,057 TEUs at the end of Q2, an increase of more than 14 percent, despite not changing more than +/- 1 percent in the previous three quarters. Unlike the other two major east-west trades, however, the G6 Alliance members still hold a dominating 41.71 percent of the market share in the westbound transatlantic, despite being down from 45.48 percent at the end of Q1. That loss in market share has ostensibly been grabbed up by MSC, whose market share increased from 22.52 percent at the end of the first quarter to 27.51 percent of weekly allocated capacity at the end of the second quarter, and CMA CGM, which increased its market share from 5.52 percent to 6.59 percent. Maersk held relatively steady, losing less than 1 percent of the market, as its share decreased from 14.69 percent to 13.73 percent. If the three carriers had been allowed to join forces to form the P3 Network Alliance, however, their combined market share of 47.83 percent would have surpassed even the G6, unlike at the end of last quarter when the G6 still held a slim lead on the projected P3. In contrast, the CKHYE Alliance is still only a minor player in this trade, controlling 7.63 percent of the weekly allocated capacity, although that does represent an incremental increase from 6.81 percent at the end of Q1. Non-alliance carriers are similarly being excised from the transatlantic trade by their larger counterparts, their market share a meager 3.64 percent at the end of Q2, down even more from 4.16 percent at the end of Q1.
BlueWater Reporting tracks the weekly TEU capacity of competitive direct liner services on 30 individual lanes operating between Asia, Europe, and North and South America, taking into account skipped sailings and slow steaming, and estimates the allocation of that capacity within each specific trade lane. BlueWater’s quarterly World Liner Supply Reports are designed to help ocean carriers, non-vessel-operating common carriers, freight forwarders, shippers, ports and analysts monitor trends in ocean liner shipping capacity.
The 2014 Second Quarter WLS report is downloadable in Excel spreadsheet form here. You must be an American Shipper Global subscriber, a BlueWater Reporting individual subscriber or a BlueWater Reporting corporate subscriber to download the World Liner Supply Report. You may also purchase this report for $250 here.