Ocean Alliance’s capacity reduction lower than 2M and THE Alliance
Carriers have announced only 3 new blank sailings on Transpacific and 2 new on Asia-Europe. On top of that, 2M continues to suspend the AE2/Swan and AE20/Dragon on Asia-Europe, while THE Alliance have also extended the suspension of their FE4 service. The fewer new blank sailings does not mean that demand has come back to normal, as it dropped -15.9% Y/Y in April and -11.4% Y/Y in May – but rather that the carriers seem to believe that their current blank sailings program is adequate – aggressive even, considering that a host of blank sailings have been re-instated in recent weeks.
HE Alliance did not reach a peak as high as 2M and Ocean Alliance but maintained a capacity reduction level of 30%-35% all the way through to week 28. On the other hand, Ocean Alliance’s cumulative capacity reductions by week 40 are the lowest of the three alliances, and by quite some margin.
'This is a trend that we also see on Asia-North America East Coast and Asia-Mediterranean as well. As we have noted at several occasions, there is no logical basis to suggest that Ocean Alliance would be impacted differently than the other two alliances. Which makes these developments a bit curious, especially since this is not a trend that we see in 2019 either.