With the depressed US economic situation showing no signs of a recovery, shipping lines are continuing to pull capacity from both the Asia-US West Coast and East Coast trades. But while earlier indications were that the withdrawn capacity would head for established trades such as Asia-North Europe and Asia-Mediterranean, there seems to be a growing tendency among lines of filtering additional capacity into trades that are seen to have big market growth potential in the near future.
The latest line to embrace this approach is Korea's Hyundai Merchant Marine (HMM), which is about to pull out five post-panamax ships of 4,400 TEU capacity from its New World Alliance transpacific routes and switch them to the Korea-Middle East trade, thereby more than doubling existing capacity on its Middle East service known as KMS.
Interestingly, the KMS only caters for Korea-Taiwan-Southern China volumes over the Middle East and according to analysts, it is a trade that is only expected to grow some 12 to 15 percent this year.
To replace the capacity on the transpacific, HMM and its alliance partners will phase in newbuildings of 4,700 TEU vessels that were booked through Korean shipyards at least two years ago.
One major shipper told Cargonews Asia: "Shipping lines have huge problems looming with the new capacity coming on stream, and need somewhere to put their surplus tonnage. There are serious limitations on the Asia-Europe trade, mostly because of port congestions and the inability of some terminals to maintain fixed berthing windows for the vessels. So where do the shipping lines turn? Simply to other budding trade lanes such as Asia-Middle East, and there, too, problems will soon arise over too much capacity to meet market demand.''
One of the biggest problems detracting carriers from shifting transpacific rejects to established trades such as Asia-Europe still centres on port congestion and the inability of ports and terminals to ensure minimal waiting delays.
Europe's major container port, Rotterdam, is no different from the rest, with feeder vessels for example having to spend almost half port turnround time waiting for a berth.
According to one major feeder line: "In February, approximately 47 percent of the total port time at Rotterdam's ECT was spent waiting to work cargo, and once a berth was secured, the average crane movements amounted to some 15 per hour, half the usual average.'' The reason is not because of the terminal's inability to handle the ships, but the back distribution and inbound handling over the immediate hinterland. Serious concerns have been raised at this intermodal situation but it has yet to be resolved.
Linked with that concern is the containership newbuilding programme that demands future deployment for ships that cost in excess of US$30,000 to lay up, and the continued downturn in the US market.
With the Asia-Middle East market demand unlikely to grow beyond 15 percent this year, HMM's move to more than double its capacity on one service alone is "more than just alarming", said one shipping source.
The latest line to embrace this approach is Korea's Hyundai Merchant Marine (HMM), which is about to pull out five post-panamax ships of 4,400 TEU capacity from its New World Alliance transpacific routes and switch them to the Korea-Middle East trade, thereby more than doubling existing capacity on its Middle East service known as KMS.
Interestingly, the KMS only caters for Korea-Taiwan-Southern China volumes over the Middle East and according to analysts, it is a trade that is only expected to grow some 12 to 15 percent this year.
To replace the capacity on the transpacific, HMM and its alliance partners will phase in newbuildings of 4,700 TEU vessels that were booked through Korean shipyards at least two years ago.
One major shipper told Cargonews Asia: "Shipping lines have huge problems looming with the new capacity coming on stream, and need somewhere to put their surplus tonnage. There are serious limitations on the Asia-Europe trade, mostly because of port congestions and the inability of some terminals to maintain fixed berthing windows for the vessels. So where do the shipping lines turn? Simply to other budding trade lanes such as Asia-Middle East, and there, too, problems will soon arise over too much capacity to meet market demand.''
One of the biggest problems detracting carriers from shifting transpacific rejects to established trades such as Asia-Europe still centres on port congestion and the inability of ports and terminals to ensure minimal waiting delays.
Europe's major container port, Rotterdam, is no different from the rest, with feeder vessels for example having to spend almost half port turnround time waiting for a berth.
According to one major feeder line: "In February, approximately 47 percent of the total port time at Rotterdam's ECT was spent waiting to work cargo, and once a berth was secured, the average crane movements amounted to some 15 per hour, half the usual average.'' The reason is not because of the terminal's inability to handle the ships, but the back distribution and inbound handling over the immediate hinterland. Serious concerns have been raised at this intermodal situation but it has yet to be resolved.
Linked with that concern is the containership newbuilding programme that demands future deployment for ships that cost in excess of US$30,000 to lay up, and the continued downturn in the US market.
With the Asia-Middle East market demand unlikely to grow beyond 15 percent this year, HMM's move to more than double its capacity on one service alone is "more than just alarming", said one shipping source.