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East Bound Transpacific Ocean Update: Ocean Carriers Reduce Capacity Before Peak Season

Over the last several weeks, the ocean carrier alliances have announced a number of changes to their Asia to U.S.A. ocean services. Changes such as removing entire service strings, implementing void sailing programs, and combining service strings (which effectively removes one or more service loops), are now being implemented. These changes suggest that the carriers are seeking solutions to deal with rising bunker costs, ongoing supply overcapacity in the Asia to U.S.A. trade, concerns over the U.S.A. / China trade tensions, and the ultimate effect on future demand in the market.

The following are the changes announced thus far. The three Asia to United States West Coast (USWC) services referenced below represent a weekly total of 21,300 TEUs removed, or 6.7% of the total capacity to the West Coast. The 2M / ZIM cooperation is the first service adjustment announced for Asia to United States East Coast (USEC).

Alliance Service String Effective Origin Service Destination
2M EAGLE early-July Taiwan / China / Korea Asia to USWC Vancouver / Seattle
Ocean Alliance AAC late-August Shanghai / Ningbo Asia to USWC Long Beach
THE Alliance Combine PS5 & PS8 August China Asia to USWC Prince Rupert / Long Beach / Oakland
2M / ZIM Combine 7 services to 5 September China / Southeast Asia / Korea Asia to USEC  U.S. East Coast

Peak Season Perspective:

This overall reduction in capacity will yield better vessel utilization, increasing the likelihood of overbooking. Space is at a premium now and we anticipate that the ocean market will continue to be very dynamic over next few months. MIQ Logistics is fully engaged with our ocean carrier partners and will strive to minimize service interruptions.

MIQ will continue to monitor capacity and service changes in the ocean freight market. We will continue to provide carrier updates and announcements as they become available.

For more information, please contact your local MIQ Logistics representative.