Without a doubt, the key issue for 2016 on the world’s three major trade lanes will be the direct effect the various changes caused by mergers/sales of lines will have on the three alliances in which the carriers are involved.
The potential merger of China Shipping and Cosco, will affect the CKYHE and the Ocean Three consortia, and the potential sale of APL to CMA CGM will impact the G6 and also Ocean Three.
Although strongly denied, a potential tie-up of both Hanjin and Hyundai would also have an effect on the CKYHE and G6 alliances, particularly with the tacit support of the Korean government to upsize both lines’ capacity through the provision of financing for 20,000-TEU vessels.
The question of structural overcapacity, despite the alliances’ attempts to blank out sailings, and some lines laying up ships, will undoubtedly continue. Given that the Asia-Europe trade, the destination for the majority of mega-ships, has an annual volume of around 15 million TEUs per annum, the average requirement to carry this volume is 6 vessels per week, at 18,000 TEUs.
Currently, the Asia-Europe trade is showing a year-to-date reduction of almost 4.5 percent against the volumes for 2014. Of this, the fall-off in volumes to Russia accounts for almost 60 percent of the decline, with the balance being evenly spread across other European countries, and only Turkey, Poland and France showing marginal year-over-year growth.
There is little consensus on what will happen in 2016, with estimates varying wildly, but it would appear that it will be some time before all the current and new ULCCs are full.