Growing pressure in the Far East – ECSA lane

Today’s announcement follows recent shake-ups in the Far East – ECSA lane:

  • Coscon and Evergreen first decided to go big and are in the process of deploying 8,000+ teu ships into the trade
  • MSC launched a standalone Ipanema.

In the light of the recent wave of service revamps and consolidation on the Asia-ECSA tradelane and given the trend toward larger ships to serve South America, it seems highly likely that MSC’s new 5,000 teu Ipanema loop might only serve the carrier as a starting point for greater things. MSC has received recently and continues to receive numerous compact wide-beam 9,000 teu ships with medium-high reefer capacity. These vessels seem ideal for South America and MSC is surely poised to send them to the ECSA once they have managed to secure a certain base volume.

Given that the restructuring announced by the new group of carriers will result in a net increase of capacity, all these expansions on the Asia-ECSA market might very well wreak havoc on freight rates, which – because of the continued capacity increases – have already come under pressure.

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