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Liner Shipping Ahead: Gloomy Outlook for Asia–Europe Trade

Liner Shipping Ahead: Gloomy Outlook for Asia–Europe Trade

Alphaliner at Intermodal Europe 2022

Alphaliner, part of AXSMarine – pioneer in the of SaaS shipping software and data for Dry Bulk, Tanker, and Containerships – reaffirmed its global leadership with a heading presentation at Intermodal Europe 2022. The event is a world-class exhibition and conference for companies associated with the container and intermodal industries and covers all areas of container shipping and logistics.

In his talk, Stefan Verberckmoes, analyst and editor at Alphaliner, disclosed valuable insights on the many disruptions in the trade during the pandemic and the following normalization aspects.

While carriers are still publishing record profits for their liner shipping activities in Q3, the outlook for the Asia – Europe trade is increasingly gloomy as spot ocean freight rates are still nosediving and 69 more Megamax ships (23,000+ teu capacity) are under construction.

Liner shipping sector experiences acute shortage of capacity for the first time ever in 2021 and 2022

"As a consequence, spot ocean freight rates increased to sky-high levels. This evolution was unseen in the liner shipping industry but is quite common in bulk markets where the cargo-demand/ship-supply-ratio can trigger dramatic rate changes" revealed Stefan.


"The general expectation that this bullish liner market was to normalize gradually in the course of this year has proven to be unrealistic. Cargo volumes have dropped substantially since August, which accelerated the level of rate declines.

Several carriers predicted this market correction but were confident that rate levels would not return to pre-COVID levels. Spot ocean freight rates between Shanghai and North Europe have actually fallen from a high of $15,594/feu in early January 2022 to $3,526/feu last Friday, November 4th (down -77.4%).

The fact that these spot rates faced another 16.1% decline last week indicates that the pressure on the rates is not easing yet and that the market may be heading towards pre-COVID rate levels of $2,000/feu" added the senior shipping analyst at Alphaliner.

The only way to prevent rates from further sliding is active capacity management

"After the collapse of the Korean carrier Hanjin in 2017, the liner shipping sector managed for the first time to adjust their capacity to actual cargo demand. The next weeks will show if they still have these skills.


Going forward, the return of overcapacity in liner shipping seems unavoidable. According to Alphaliner data, a record amount of 7.5 Mteu slots is under construction. In 2023 and 2024 some 5.1 Mteu of new capacity is to be delivered. This represents about 20% of the current cellular container fleet" concluded Stefan.

Learn more about Alphaliner now to benefit from a proprietary database reflecting decades of data collection.

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