By Arthur Chen    Photo: Tom Fisk，Link: Pexels 

According to data from the shipping consulting agency, Sea Intelligence, in 2020, the global container shipping capacity was 23.8 million TEU in July. Among them, the capacity of the trans-Pacific route was 3.74 million TEU, accounting for 17.5%. As of July this year,2021, global container shipping capacity has increased to 24.77 million TEU. The capacity of trans-Pacific routes has grown to 4.88 million TEU, and its share has risen to nearly 20%. Due to the strong demand for trans-Pacific routes but the shortage of container because of Covid pandemic, constant ports congestion caused limited operating ability because of considering old and insufficient equipment in American port facilities and railway transferring hubs. As a result, shipping prices soared. This has attracted a lot of players who were not involving in US trade regularly. They take part in this hot money-grabbing market to increase the supply of shipping capacity in the ocean market. These shipping lines outside of the three major maritime alliances (2M, THE, Ocean Alliance) are quickly grabbing market share. It is estimated that in the first half of this year, the container ships implement supply of capacity on trans-Pacific routes has grown by 20%. As the aforementioned out of date facilities in ports and railway transfer hubs, the transportation capacity turnover is kind of slow. Ports congestion in the United States have been increasing. The average waiting time for berths in Los Angeles on the west coast is at least 7-10 days and no less than 40 container ships anchoring in the open sea waiting area. The available transportation capacity is still very stiff, and the ocean container transportation market is still in short supply.

Since the second half of last year, most of the “new capacity” of trans-Pacific routes has been provided by shipping lines of non-maritime alliances. The ratio of their capacity on trans-Pacific routes is increasing sharply. Especially on the Asia to west coast US route, the “new capacity” of non-maritime alliance has surpassed the 2M alliance (Maersk, MSC) and THE alliance, almost as much as the (OCEAN Alliance). So far, nearly 30% of the capacity of the Asia to west coast of US route has come from non-maritime alliance liners. However, in the US East route, they are much low share than the maritime alliances, not exceeding 10%. The most active ones are Wan Hai line and China United line. These two shipping lines have added ten trans-Pacific routes and added 250,000 TEU of “new capacity”.

Let’s see two good examples.

Wan Hai line opened the Asia-US East route (AA7) from June 18th, 2021, which is equipped with 10 x 2800-4000TEU container ships for regular cruise services. This is the second step by that Wan Hai line that entered the US on four regular routes on the west US route in March this year. It shows their large ambition to deploy North American routes. The east US route will cruise for 70 days. The ports of calls along the route is Taipei-Xiamen-Shekou-Gaimei Port-New York- Savannah-Taipei. This move will be an important milestone for Wan Hai line to expand its ocean territory. Since last year, Wan Hai line has been expanding aggressively and continuously purchasing ships and containers. This is an action to declare that long-haul routes will be one of their developing blueprint. From 2020 to 2023, Wan Hai line will deliver 32 new ships, including 8 x 3063TEU, 12 x 2038TEU and 12 x 3013TEU container ships. At present, Wan Hai line ranks 10th in the world. As of June 2021, it has 132 ships in operation, of which its own ships account for about 56% and the capacity is about 369,000 TEU.

In July this year, China United line opened the TPX service for the West America route for the first time, placing in five 1700 to 4400 TEU container ships. Direct sailing from Shanghai Port to Los Angeles Port in the United States which provide customers with point-to-point express services. At the initial stage of the launch of the TPX route, trial operations will be carried out at a frequency of two to three small ships per month. After September, the TPX route will gradually be adjusted to larger ships and upgraded to a weekly route. China United line also cooperated with Shanghai Jinjiang Shipping to add two container ships with a capacity of 1700TEU each on the TPX route. According to statistics, China United Lines (CU Line) has a total capacity of 59,116 TEU (0.2% of the world’s share), ranking 27th in the world, with a total of 25 ships (including one of its own ships, leased Twenty-four ships), chartering accounts for 99%.

Shipping analysts believe these non-maritime alliance container shipping lines can compete with the trans-Pacific routes market, which dominated long time by 3 major maritime alliances, because they have more flexibility in the business strategy and can always fast target on niche markets.

For such a situation of "difficult to get a container booked " this year, cargo owners and freight forwarders have all done their best to find more spaces to meet the explosive import demand in the United States. In addition to the three major maritime alliances, these new players have stepped into the US trades market. We warmly welcome the arrival of new teammates. In fact, from the author’s company, we have helped some American customers to relieve  certain number of long-standing containers to these new players, and they have been successfully put on shelves in stores across the United States. Facts have proved that where there is a market, there is demand, and where there is demand, there is supply. We are optimistic that the ocean shipping market will return to the balance of supply & demand.

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