Carriers are competing for market share as demand drops and alliance changes are on the horizon
3 weeks ago
Carriers are competing for market share as demand drops and alliance changes are on the horizon
The upcoming reshuffling of container shipping alliances in 2025 is driving liner operators to fiercely compete for market share, which is undermining capacity discipline, even as freight rates continue to decline.
According to Linerlytica's report today, only 37 box ships, totaling 77,185 TEU representing just 0.3% of the active fleet are currently without employment.
The consultancy highlighted that demand for additional tonnage remains strong, with carriers eager to acquire all available vessels in the charter market over the next two months. The idle fleet is notably low for this time of year, and scrap sales for the year have fallen below 100,000 TEU, as carriers prepare for an intense battle for market share ahead of the 2025 alliance reshuffle.
The reluctance of operators to reduce capacity complicates efforts to implement a planned General Rate Increase (GRI) of $1,000-$2,000 per 40-foot container for Asia-Europe services scheduled for November 1.
Currently, 504 ships, totaling 7.33 million TEU, are operating on Asia-Europe routes, including the Mediterranean, reflecting a 25% increase year-on-year. Meanwhile, following recent strikes at U.S. East Coast ports, capacity for Asia-USEC has dipped 3% year-on-year, with 254 ships totaling 2.72 million TEU, while capacity on the Asia-US West Coast has increased by 22%, reaching 312 ships and 2.67 million TEU.
Linerlytica noted that carriers have not adjusted Asia-North Europe capacity in response to reduced cargo demand, with scheduled capacity from Asia expected to rebound by over 25% in the coming weeks. Besides a few selective void sailings, no carriers on the Asia-Europe route are planning winter capacity reductions, which could hinder efforts to stabilize declining freight rates.
It’s telling that mainline operators are still actively seeking tonnage; last week marked one of the most active periods for chartering, with numerous new agreements and extensions finalized. Companies like Maersk, CMA CGM, Cosco, Hapag-Lloyd, and Evergreen were among those securing new charters or renewals.
Linerlytica added that vessel availability is limited across all size segments, and forward fixtures are becoming increasingly common, even for smaller ships of 1,500-3,000 TEU, which previously had limited availability for such arrangements.
Source: The Loadstar