HONG KONG : Container freight rates are still falling, while charter rates are holding up, suggesting that liner operators are chasing market share, even if it means a price war.
Linerlytica‘s latest report, issued on 13 March, stated that around 738,014 TEU of capacity, or 2.8% of the fleet, is now idled, down from a peak of 3.8% in February, as shipping lines are reactivating inactive vessels after the Chinese New Year holidays.
MSC has widened its gap against Maersk Line to 587,000 TEU, with the Swiss-Italian market leader standing down at 68,000 TEU, compared with 298,000 TEU for Maersk.
MSC and Maersk Line will disband their 2M alliance in February 2025, and the two carriers have been pursuing different strategies since the Covid-19 pandemic pushed up freight rates to historical peaks.
Linerlytica observed, “OCEAN Alliance carriers have the smallest number of ships idled, compared to 2M and THE Alliance, in a clear sign that carriers are pursuing very different strategies in dealing with the capacity surplus. Freight rates are still falling while charter rates are holding their ground, in a further sign that carriers are intent on chasing market share despite the softening freight market.”
MSC received the world’s largest and second largest container ships last week, with the 24,346 TEU MSC Irina and 24,116 TEU MSC Tessa delivered in two straight days from Yangzijiang Shipbuilding and Hudong-Zhonghua Shipbuilding respectively. MSC also took delivery of the fourth of eleven 15,000 TEU ships chartered from Eastern Pacific Shipping; deliveries are expected by the end of this year.
The new ships have upped MSC’s capacity to an all-time high of 738 ships of 4.77 million TEU, broadening the gap with Maersk Line to 587,120 TEU.