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Overcapacity seen in 2017-Q4


One is now heading into the fourth quarter, where one would expect to see the traditional culling of deployed capacity relative to the peak season third quarter, but the current capacity outlook does not show a Q4 drop in deployed capacity in line with past years. 2017-Q4 is currently slated for massive overcapacity, as the traditional seasonal culling of capacity has not (yet) been scheduled. If the past five years is used as a guide, 25 sailings will have to blanked on Asia-Europe, while Transpacific will require the blanking of 67 average-sized sailings, according to a release by SeaIntel Maritime Analysis.


Over the 2012-16 period, the fourth quarter deployed capacity on the Asia-North Europe trade lane has on average contracted by -6.6 per cent relative to the third quarter, but 2017-Q4 is currently scheduled to shrink by just -0.8 per cent relative to 2017-Q3. If the same seasonality is assumed, a total of 193,000 TEUs would have to be blanked over the entire Q4 period, equal to the blanking of 13.5 average sailings, or roughly one sailing per week.


On Asia-Mediterranean, assuming the average 2012-16 Q/Q contraction of -10.2 per cent holds true, the trade lane is currently scheduled for an excess capacity of 126,000 TEUs in Q4, which would equate to the blanking of 11.5 average-sized sailings, or a little less than one per week.


Deployed capacity on Asia-US West Coast in 2012-16 has seen Q4 on average contract by -4.5 per cent compared to Q3, which would leave an excess of 184,000 TEUs of capacity currently scheduled for 2017-Q4, equal to the blanking of a massive 25.1 average-sized sailings, or close to two sailings per week.


On Asia-US East Coast, deployed capacity is currently scheduled to grow by 4.1 per cent over 2017-Q3, which would yield a Y/Y growth of a staggering 21.9 per cent. This would mean an excess capacity of 247,000 TEUs if the 2012-16 seasonality is assumed, which would require the blanking of a staggering 32 average-sized sailings, or almost 2.5 sailings per week, the release pointed out.


Source: Exim News Service - Copenhagen, Oct. 11


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