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Alphaliner: Rising container capacity threatens rate recovery

Mar 31, 2010 Logistics

FEARS have been expressed that having laid-up ships return to service, thus boosting capacity 785,000 TEU in coming months, threatens an ongoing rate recovery upon which carriers have pinned much hope.

"This could threaten the nascent recovery in the liner markets," said the Paris-based Alphaliner analysts, adding that the upswing in capacity in the first four months of this year contrasts with a 790,000 TEU removed from the trades in the same period last year.

The result will be price cutting by carriers, Alphaliner said, noting that spot freight rates on the Far East-Europe trade had fallen by US$310 per FEU within a fortnight.

"This is a response to the new capacity being introduced. More rate declines are expected in the coming weeks triggered by the new service launches," Alphaliner said.

It has been said that the increase in capacity has been fuelled by signs of resurgence in demand with the eight leading container ports showing a 22 per cent year-on-year increase in cargo volume in the January-February period.

(Source: www.schednet.com)

 
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