Carriers failed to push through with the 1 December rate increases, with freight rates continuing to drop across the board on softening demand and weakening vessel utilisation. The sharpest rate declines were recorded on the East Coast South America, US East coast and Middle East routes last week, with attempts to raise rates in December also expected to fail. Carriers will attempt to push for a new round of rate increases in January where they will stand a better chance of success with demand expected to strengthen before the Chinese New Year holidays but any rebound will likely be brief, with carriers still unable and unwilling to remove sufficient capacity to match the drop in demand. Despite the earnings decline, new entrants on the Asia-Europe and Transpacific have still not fully withdrawn the ships on the 2 routes with only a single casualty that have made a full exit so far.
The new entrants on the Transpacific and Asia-Europe routes are facing significant pressure after the collapse in freight rates, with limited options for redeploying the ships that they have on these routes. CU Lines have given notice for the early termination of the charter of 12 panamax ships that it currently deploys on these routes (see details on page 20). It follows the termination of the China-Europe service of UK based operator Allseas Global Project Logisitcs which had filed for insolvency in October after failing to meet its commitments on the charter of 6 ships that it had deployed.
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