Transpacific utilisation tightens
- By MDS Transmodal
- •
- 18 Jul, 2018
Average load factors on the Asia-North America trade climbed to 60% in the second quarter on the back of backhaul gains, off setting a marginal drop in headhaul loads.
The improving demand environment during the second quarter of the year, accompanied by supply declining, helped lift the utilisation level for the transpacific trade lane, up from 57% in the second quarter of 2017 to 60% in the second quarter of 2018.
Other country pairs that drove an increase in vessel utilisation were Vietnam to the US and China to Mexico, both reported to have increased by 7% during the second quarter of 2018 compared with last year.
Load factors were enhanced amid an improved performance on backhaul westbound services, where the utilisation level was estimated to have seen an increase of around seven percentage points to 55%, driven by a 3% rise in demand and a 10% drop in capacity against the same three-month period last year.
In contrast, we estimated a decline in the utilisation level on headhaul services travelling in the eastbound direction with demand growing at a lower rate than supply. This resulted in a utilisation level down by more than four percentage points.
Based on the latest trade data available at the time of this analysis, the increase in cargo moved in the eastbound direction had mainly been driven by the growth in traffic moved between China and the US, estimated to have risen by 2% compared with the same quarter of 2017.Other country pairs that drove an increase in vessel utilisation were Vietnam to the US and China to Mexico, both reported to have increased by 7% during the second quarter of 2018 compared with last year.
Looking at the commodities, at a Standard International Trade Classification five-digit level, moved from China to the US, we have identified ‘vacuum cleaners with a self-contained electric motor’, up by 36%, and ‘tableware, kitchenware, other household articles and toilet articles’ rising 5%, as the key drivers.
In the opposite direction, we report an increase in the volumes moved between Canada and China, of approximately 8% in the second quarter of 2018 against the corresponding period last year.
During the same period, services from the US to Vietnam also saw an increase in demand, estimated to have jumped by as much as 70% in the last year.
Looking at the commodities moved between these countries, we identified ‘chemical wood pulp, soda or sulphate,
other than dissolving grades’ climbing from 32,000 teu to 33,000 teu. Elsewhere, from Canada to China ‘peas’ increased from 20,000 teu to 32,000 teu, while ‘ferrous waste and scrap, jumped from 8,000 teu to 17,000 teu. Unbleached kraft paper or paperboard/ corrugated paper’, was up from 3,000 teu to 10,000 teu from the US to Vietnam.
In the opposite direction, we report an increase in the volumes moved between Canada and China, of approximately 8% in the second quarter of 2018 against the corresponding period last year.
During the same period, services from the US to Vietnam also saw an increase in demand, estimated to have jumped by as much as 70% in the last year.
Looking at the commodities moved between these countries, we identified ‘chemical wood pulp, soda or sulphate,
other than dissolving grades’ climbing from 32,000 teu to 33,000 teu. Elsewhere, from Canada to China ‘peas’ increased from 20,000 teu to 32,000 teu, while ‘ferrous waste and scrap, jumped from 8,000 teu to 17,000 teu. Unbleached kraft paper or paperboard/ corrugated paper’, was up from 3,000 teu to 10,000 teu from the US to Vietnam.
Transpacific load factors average utilisation
Transpacific load factors average utilisation (combined)
Transpacific capacity changes (Q2 2018)
• Ocean Alliance - PRX/PCS1/AAS2 (previously called ‘OCEAN THREE - PRX/AWS4’): Capacity deployed increased by 25% between the second quarter of 2017 and the same quarter of 2018. The average ship size is estimated to be more than 14,000 teu against the 11,300 teu average offered on services last year.
• 2M Alliance - PHX/JAG/AE12/TP2: Capacity deployed on this service increased by 28%, up from 658,000 teu in 2017 to circa 672,000 this year. The average ship size is estimated to be of almost 13,000 teu as compared to the 9,900 teu estimated for the second quarter of 2017.
• THE Alliance - PN1 (previously called ‘CKYE ALLIANCE - PNW/PN1’): Supply increased by 4% between the second
quarter of 2017 and the same quarter of 2018. The average ship size has not increased signifi cantly in the last year
(remaining below 6,000 teu).
• Ocean Alliance - PRX/PCS1/AAS2 (previously called ‘OCEAN THREE - PRX/AWS4’): Capacity deployed increased by 25% between the second quarter of 2017 and the same quarter of 2018. The average ship size is estimated to be more than 14,000 teu against the 11,300 teu average offered on services last year.
• 2M Alliance - PHX/JAG/AE12/TP2: Capacity deployed on this service increased by 28%, up from 658,000 teu in 2017 to circa 672,000 this year. The average ship size is estimated to be of almost 13,000 teu as compared to the 9,900 teu estimated for the second quarter of 2017.
• THE Alliance - PN1 (previously called ‘CKYE ALLIANCE - PNW/PN1’): Supply increased by 4% between the second
quarter of 2017 and the same quarter of 2018. The average ship size has not increased signifi cantly in the last year
(remaining below 6,000 teu).
Obsolete services
• 2M Alliance – SEQUOIA/TP3 service: Deployed fi ve panamax vessels and operated between China and Long Beach; it called at only four ports and thus off ered quick transit times.
• The CKYE Alliance – MD1/PM1 service: Operated 16 vessels of 9,750 teu in a pendulum style between the Mediterranean to Far East then continuing to the US west coast.
• The G6 Alliance – PA1 service: Operated by 15 panamax vessels and consisting of two loops; connecting northern Europe with the North American east coast and the North American west coast with Asia via the Panama Canal.
Both the CKYE Alliance and G6 Alliance ceased to exist after the alliance restructuring that took place in April 2017.
• 2M Alliance – SEQUOIA/TP3 service: Deployed fi ve panamax vessels and operated between China and Long Beach; it called at only four ports and thus off ered quick transit times.
• The CKYE Alliance – MD1/PM1 service: Operated 16 vessels of 9,750 teu in a pendulum style between the Mediterranean to Far East then continuing to the US west coast.
• The G6 Alliance – PA1 service: Operated by 15 panamax vessels and consisting of two loops; connecting northern Europe with the North American east coast and the North American west coast with Asia via the Panama Canal.
Both the CKYE Alliance and G6 Alliance ceased to exist after the alliance restructuring that took place in April 2017.
First published in Lloyd's List Containers Magazine May/June 2018