Ocean carriers are considering laying up ships at the end of January or the beginning of February to reduce capacity on the Asia-North Europe route before the Chinese New Year in February, making shippers apprehensive. Facing financial pressure, carriers are tackling cash burn during 3Q and expected 4Q losses. Using empty 24,000 TEU vessels in Asia-Europe services in times of lack of demand is still another challenge concerning vessels.
Heightened Risks in Asia-Europe Services
Asia-Europe service carriers are experiencing a perfect storm involving simultaneous delivery of 24,000TEU ultra-large container vessels and significant contraction in the market for their seaborne services. Filled with these gigantic cargos are these mega vessels at weak demand that these carriers might want to stop operation as they leave their yards. It is very important to note that this important trade lane of vessel balance is a crucial issue facing carriers.
Financial Strain and Market Impact
There is pressure on carriers and significant contractual negotiations with possible idling vessels before it gets better. The environment created by low spot rates and difficult bargaining makes a gloomy forecast of the future of the container line sector.
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Source: THE LOADSTAR
