Position of container shipping lines in Asia-Europe transport is changing

2024/03/08 at 3:53 PM

The share of container carriers in handling commodity trade between Asia and Europe is definitely changing. Reshuffles are taking place both among the shipowners gathered in the three alliances and in the form of growth trends in this market of other ‘independent’ shipping companies.

There are several reasons. The need for container vessels to operate on east-west routes around southern Africa that requires a larger fleet, an increase in spot freight rates encouraging involvement in this segment, and the development of container ship fleets at different rates by individual companies. These supply-side causes are further complicated by changes in demand and geopolitical shocks.

Source: Pixabay

Reshuffles ‘at the top’

During the year (from March to March), Ocean Alliance lost its leading position in servicing east-west trade, according to Alphaliner data. It was outdone by MSC (a shareholder of the 2M alliance) because it has added 488,000 TEU of transport capacity since February 2023, recording an increase in its fleet by 54 per cent. This new MSC capacity is divided into 279,000 TEU as part of 2M services and 208,000 TEU that the carrier uses in its standalone services.

Thanks to MSC, the 2M alliance is now the largest among the three alliances serving the Asia-Europe transport market, with 33.4 per cent (a year ago in March – 32.4 per cent). It is ahead of Ocean Alliance (33 per cent, 37.5 a year ago) and The Alliance (23 per cent, down from 26 per cent). Ocean Alliance’s lower market share is due to carriers “not taking delivery of many new ships and still are struggling to fully provide ships on all their Asia-Europe loops”, said Stefan Verberckmoes, the senior shipping analyst at Alphaliner. In turn, the decline in THEA’s market share is largely due to the suspension of the FE5 loop from Southeast Asia to Europe in November of last year.

Outsiders on the attack

The need to extend the route around Africa increased the demand for ships. Major carriers could not always meet these requirements, therefore smaller shipping companies successfully filled the gap. New Alphaliner data indicate that carriers such as Newnew Shipping, OVP Shipping, Safetrans, FESCO, Akkon and CStar have doubled the number of line transports in the last 12 months. Their transport capacity currently amounts to 308,300 TEU, compared to 154,600 TEU a year ago, which constitutes approximately 5 per cent of the market share on the Asia-Europe routes. These data include the rapidly growing Israeli company ZIM (it has a 1.2 per cent share in the above-mentioned market) and SeaLead Shipping, which, after taking over the Asia-Med fleet, increased its transport capacity by 40.6 per cent year to year and has a 1 per cent share in the mentioned market.

Further changes?

Changes in the share of east-west transport services can be expected due to a further decline in demand that has been recorded for many months, analysts estimate. According to the opinion of forwarder James Hookhaman, this decline may be related to the collapse of trade due to the parliamentary and presidential elections in Europe, the USA, India and the UK. In turn, according to Emily Stausbøll, an analyst at Xenet, “the market share of individual alliances and MSC itself will change in 2025, regardless of whether container ships will sail through the Suez Canal next year or not”. This will be the result of the collapse of the 2M alliance and the creation of a brand new one, Gemini Cooperation, planned by Hapag-Lloyd together with Maersk.

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