SIMIC

Although adding capacity will put downward pressure on rates, increasing trade between the US and Europe should buoy the trans-Atlantic market, according to IHS Media.

Ocean Alliance's "Liberty Bridge" service from Europe to the US has gone from a Panamax-size service of 8,500 TEU to a post-Panamax service of about 12,000 TEU with new ships being rotated into the service.

The Ocean Alliance carrier members are Cosco, OOCL, Evergreen and CMA CGM.

In December, CMA CGM replaced two Panamax ships with two 11,388 TEU ships, the Columbia and Cassiopeia, according to the ocean carrier's latest schedule

Likewise, Evergreen Marine will rotate the 13,808 TEU Tampa Triumph into Liberty Bridge as of an early January departure from the United Kingdom, making it the largest vessel deployed in the Europe-US East Coast trade, according to Alphaliner.

Cosco Shipping, as well, rotated in three ships of approximately 13,000 TEU capacity into the Liberty Bridge service over October and November, just after they last departed Asia. The ships replace 8,500 TEU capacity vessels that Cosco had deployed.

The shift of larger ships into the trans-Atlantic trade coincided with a severe slowdown in the trans-Pacific market, Lars Jensen, CEO of consultancy Vespucci Maritime and a JOC analyst, said during a Journal of Commerce webcast last week.

At the same time, more ships became available as port congestion decreased throughout 2022, Mr Jensen said, adding that fewer ships sitting at anchor re-released 7 per cent additional supply into the market.

"Given that this is what is soaking up capacity - vessels sitting in a queue - we see a lot of capacity come back at the same time as we see demand go into a collapse," Mr Jensen said.

With vessel-operating expenses much higher due to inflation, Mr Jensen said carriers are at breakeven or losses on most trades from Asia now as rates fall below pre-pandemic levels.

Mr Jensen said the trans-Atlantic is still relatively tight due to delays at US East Coast ports caused in part by an influx of cargo being diverted from West Coast ports. As of December 2, there were 22 ships at anchor waiting for a berth at the Port of Savannah. The Port of New York and New Jersey reported four ships at anchor.

But as those issues ease, Mr Jensen said it would be "only a matter of time" before trans-Atlantic rates follow suit.

Total US imports from Europe ticked up 2.4 per cent year over year to just over 2 million TEU in the first ten months of 2022, according to PIERS. During the comparable 2021 period, US imports from Europe rose 6.7 per cent from 2020.

Along with major carriers adding capacity, niche ocean carriers are starting to add new capacity in the trans-Atlantic in response to what they see as still healthy demand.