SeaIntel Sunday Spotlight

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Week 17Issue 309
In this issue: Strong capacity injection in past 2 months
The top-100 carriers have injected substantial capacity in the past 7 weeks – forcing a rally in TC rates. However, on a year-on-year basis the injection remains moderate.
Asia-ECSA: The rare success story
The management of the supply/demand balance in the Asia-ECSA trade lane is a best practice example of how to raise freight rates to profitable levels, but can the Asia-ECSA success be replicated?
Alliances: North America-NEUR Transit Times
The trade lane from North America to North Europe will see a gain of 21 distinct port-pairs against a loss of 11. The biggest concern however will be the transit times, as 30 port-pairs will experience deteriorating shortest transit times for a total of 114 days added.
Service changes Maersk Line to revise the port rotation of the ME3 service
CMA CGM to update the port rotation of WEMED service
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Week 16Issue 308
In this issue: Are reefer-heavy trades more reliable?
Three out of the four reefer trade lanes analysed show on average a higher level of schedule reliability, when compared to non-reefer trades. On the other hand, when delays occur, they are on average longer in reefer-heavy trade lanes.
Transpacific Alliance concentration
The amount of capacity controlled by alliances on the Transpacific has risen significantly in the period 2012-2017 to the USEC, but not the USWC. Furthermore, there is no link between concentration and rate levels.
Alliances: North America-MED Transit Times
The trade lane from North America to Mediterranean will see few changes in connectivity, as 11 distinct port-pairs will be gained against nine lost. 113 portpairs will see transit times unchanged, while 20 will see it improve and 19 will see it deteriorate.
Service changes OOCL to purchase slots on PS1 service
Carriers to launch a new service
APL to join Asia-Australasia service
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Week 15Issue 307
In this issue: Transatlantic Alliance capacity injections
Both Transatlantic trade lanes will experience a significant injection of capacity compared to 2016-Q2, with Med-USEC and North Europe-USEC showing a 19.4% and 5.6% increase, respectively. Further, there does not appear to be any April capacity shortage.
Digitization: It is not about technology
A trip through the last 20 years of eCommerce history in the container shipping sector clearly shows that if this was a matter of technology, the whole industry would have become digital long ago.
Alliances: NEUR-North America Transit Times
The trade lane will experience a rather positive development in terms of port- pairs, as 29 distinct port-pairs will be gained against nine lost. The transit times will improve slightly, but overall the trade lane remains mostly unchanged.
Service changes CMA CGM to become operator on EURAF5/WEWA service
Yang Ming to start TSE service
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Week 14Issue 306
In this issue: Alliance trade lane capacity injections
Asia-USEC will see a massive alliance capacity injection of 18.0% relative to 2016-Q2, while Asia-USWC will see alliance capacity drop 3.4%. Asia-North Europe and Asia-Mediterranean alliances will grow 3.1% and 4.6% Y/Y, respectively, and 2M is the driving the capacity injection in all trade lanes except Asia-Mediterranean.
All major lines have BEC cyber risks
BEC – or Business Email Compromise – rose 1300% from January ’15 to June ’16 according to the FBI. All major container lines remain exposed, with multiple new fraudulent domains established in 2017.
Alliances: MED-North America Transit Times
While the Asia-Europe and Transpacific trade lanes will see a massive impact in terms of lost and gained port-pairs and transit times, the Med-North America trade lane will remain rather stable.
Service changes Carriers to introduce North Europe Turkey Express Service
CMA CGM to purchase slots on USW service
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Week 12Issue 304
In this issue: Transpac: up to 330M$ BAF overcharge
9 months after the expansion of the Panama Canal, the TSA has still not changed their USEC BAF formula. This leads to fuel compensation for smaller vessels which no longer reflect reality.
Alliances: Asia-MED Transit Time
While the new alliance networks will lead to loss of product diversity, transit times will be shorter, on average. Of 179 Asia-MED port-pairs that remain across the old and new networks, 90 will have a shorter transit time, while 54 will see it increase.
Service changes Carriers to close MSW service
APL to purchase slots on PS1 service
Carriers to terminate RES service
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Week 9Issue 301
In this issue: Alliances: Lost and New Transpac Port-Pairs
We analyse offered port-pairs and ports call frequency on the Transpacific trade, as we go from the current four alliances to the three new alliances. The new alliances will lead to a major loss in product diversity and a third of portpairs will lose frequency.
Schedule Reliability in Transpacific Trades
Transpacific alliance schedule reliability has improved over 2015-2016, although it has been coming down in recent months. WE see major shifting of carrier rankings in 2016, likely explained by greater carrier cooperation and thus less service diversity.
Transpacific reliability gets commoditized
Commoditization is caused by general performance improvements. Other US trades maintain wide choice of service levels in terms of reliability.
Service changes HMM to update KME service
2M to update the port rotation of Transatlantic services
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Week 8Issue 300
In this issue: Pacific contract rates 26% too low
The close link between spot and contract rates on the Pacific eastbound trade was broken in 2016/17, with contract rate levels far below levels indicated by the spot markets – expect strong increase from May’17.
Alliances: Transpacific Networks UPDATE
With major service changes to most of the networks announced by the alliance carriers, we update our alliance network analysis, and find that the Asia-USWC trade is now more balanced, and less dominated by Ocean Alliance.
Alliances: Asia-Europe Networks UPDATE
We also update our Asia-Europe network analysis, and find that most of our conclusions from four weeks ago still hold, despite major changes. 2M will offer the most unique port-pairs while Ocean Alliance will focus on frequency.
2017-Q1: 600M USD loss from BAF delay
While freight rates started to pick up in the 4th quarter, the exposure to the BAF-delay grew to the highest level in recent years. 2016-Q4 saw carriers hit with a staggering 1.2bn USD cash outlay.
Service changes 2M to revise their service network
CMA CGM to stop Baltic Levant Express service
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Week 7Issue 299
In this issue: Shorter distances undermine demand
The past year saw the average transportation distance per TEU decline by 1.5%. Since 2011, average sailing distances have shortened by 247 nautical miles.
Weak Panama Canal effect on USEC ports
Very weak to non-existent Panama Canal expansion impact on US East Coast port volumes. US East Coast ports have seen weaker-than-US-average growth in full imports in 2016-2H, while exports have only grown marginally faster than the US average.
Trade lane capacity versus spot rates
Asia-USWC, Asia-USEC and Asia-ECSA show a statistically significant negative correlation between capacity and spot rates. Correlations are also found to be negative for Asia-North Europe and Asia-Mediterranean, but they are not statistically significant.
Service changes Eimskip to revise their service network
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Week 6Issue 298
In this issue: Carriers benefitting from Panama Canal
Following an initial decline, the spread in Pacific freight rates between USWC and USEC has been steadily increasing, with carriers now fully benefitting from the savings from the expanded Panama Canal
Carrier On-time Performance in 2016
Global schedule reliability rose Y/Y by 4.5 percentage points to 82.8% with all carriers improving their on-time performances. Wan Hai was the most reliable carrier in 2016.
January 2017 IMF world outlook update
IMF projections for advanced economies have been upgraded, but US protectionist policies bring uncertainty to the economic forecast.
Service changes CMA CGM to leave WAX 2 service
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