The debut of "THE" Alliance and the OCEAN Alliance caused a rise in capacity on the transpacific trade, while a slight drop on the Asia-Europe and transatlantic market by the close of the first quarter 2017.
In the first quarter of 2017, overall ocean carrier capacity witnessed a slight boost in three out of the four major east-west trades (transpacific, transatlantic, Asia-Europe and Asia-U.S. East Coast), as carriers reshuffled in a lead up to the dissolution of the CKYHE, G6 and Ocean3 alliances into the inauguration of the OCEAN Alliance and THE Alliance in the first week of April 2017.
Not to be left out, the remaining 2M Alliance took on Hamburg Süd and Hyundai Merchant Marine (HMM) as slot purchasers in their east-west service network.
The industry also saw new South Korean liner carrier SM Line
acquire former Hanjin operated vessels with the intentions to enter the competitive transpacific market. With the newly overhauled alliance structure, overall deployment in the first quarter was still higher at the end of first quarter 2017 in the transpacific trade lanes and lower in the Asia-Europe and transatlantic trades than that of first quarter 2016.
Data from the first quarter of 2017 reflects the current capacity and vessel deployment with the inclusion of the new alliances.
According to the latest quarterly World Liner Supply Report from BlueWater Reporting
, weekly capacity from Asia to the West Coast of North America increased 5.5 percent during the quarter, from 266,604 TEUs at the end of Q4 2016 to 281,295 TEUs at the end of Q1 2017. Deployed weekly capacity from Asia to the East Coast of North America also took an upturn, increasing 8.4 percent, from 115,212 TEUs at the end of the fourth quarter to 124,849 TEUs at the end of Q1 2017, after a 5.8 percent drop the previous period.
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 for the WLS report, 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 report includes carrier group services operated by the 2M Alliance of Maersk Line and MSC; the OCEAN Alliance of CMA CGM, COSCO, Evergreen Line, OOCL and APL; as well as THE Alliance of Hapag-Lloyd, Yang Ming, NYK, MOL and “K” Line. Data from Q4 2016 will also display the former alliances, which include the Ocean3 Alliance of CMA CGM, UASC and China Shipping (now part of COSCO); the G6 Alliance of NYK, MOL, APL, Hapag-Lloyd, HMM and OOCL; and the CKYHE Alliance of COSCO, “K” Line, Yang Ming, Hanjin and Evergreen Line. Hanjin's capacity was removed from the data set in the third quarter of 2016 as most of the firm’s vessel assets have been sold or returned to ship lessors as part of its bankruptcy liquidation.
The OCEAN Alliance service network includes 41 services covering the following routes: 20 transpacific, 11 Asia-Europe/Med, three transatlantic and seven Asia-Mideast/ISC loops. THE Alliance members operate 31 services - 16 in the transpacific, eight in the Asia-Europe/Med trade, six in the transatlantic and one between Asia and the Middle East.
In accordance with the other alliance changes, the 2M Alliance put forward their new slot exchange/charter agreement with HMM and Hamburg Süd. According to BlueWater, the 2M currently operates 23 services - ten transpacific, eight Asia-Europe/Med and five transatlantic strings. Hamburg Süd and HMM are participating on 15 out of the 23 services offered by the 2M.
Overall, weekly capacity in the eastbound transpacific trade lane increased 6.4 percent to 406,144 TEUs by the end of the first quarter after a fourth quarter in which weekly deployment stood at 381,816 TEUs. Market share for the former alliances at the end of Q4 2016 saw member carriers of the G6 Alliance in the lead at 29.73 percent, CKYHE at 20.90 percent, and the Ocean 3 at 9.79 percent. The 2M Alliance also held an 18.01 percent market share in the trade by the end of the fourth quarter. The new alliance structure sees the OCEAN Alliance with a 36.44 percent in market share in the eastbound transpacific trade; THE Alliance with 27.86 percent and the 2M Alliance at 18.94 percent by the end of the Q1 2017. Non-alliance affiliated carriers saw capacity drop significantly from 82,364 TEUs to 68,055 TEUs during Q1 2017, causing their combined market share to drop from 21.57 percent to 16.76 percent in Q4.
Unlike the transpacific, the highly-competitive Asia-North Europe trade saw overall weekly capacity slightly drop from 221,195 TEUs to 217,330 TEUs. Market share for the 2M Alliance took the lead with 39.70 percent of the overall share, with the OCEAN Alliance at 34.11 percent and THE Alliance at 25.48 percent at the close of Q1 2017. Non-alliance lines continue to have little involvement in the westbound Asia-North Europe trade with just 0.71 percent of the total market share, with the exception of a few slot-purchasing agreements.
Overall, capacity in the transatlantic trade also dropped slightly, decreasing 1 percent for the quarter, from 69,459 TEUs to 68,768 TEUs. THE Alliance members maintained the top spot with weekly deployed capacity at 20,872 TEUs and a 30.35 percent market share. Non-alliance services claimed a large portion of the trade at 26.66 percent by the end of Q1 2017. The 2M remained fairly steady in the transatlantic trade with a market share of 22.81 percent, slightly up from 22.71 percent during the previous period. The OCEAN Alliance rounded out the grouping with a market share of 20.18 percent.
Weekly deployed capacity remained marginally unchanged for members of the 2M Alliance at 15,683 TEUs, while THE Alliance members deployed 20,872 TEUs and the OCEAN Alliance deployed 13,877 TEUs. Non-alliance affiliated carriers removed 14,231 TEUs of weekly deployed capacity in the transatlantic trade, decreasing by 4,851 TEUs at the end of Q4 2016 to 18,336 TEUs at the end of Q1 2017.
The 2017 First Quarter World Liner Supply Report is downloadable in Excel spreadsheet form here.
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