Evergreen Pulls Fast One to Up China to U.S. Shipping Market Share
Recently it has almost seemed as if all the ocean carrier lines have been acting in congruity, even unison, to affect prices of shipping cargo containers internationally. However, in a shrewd move opposite of the pack, Evergreen Line increased its market share by capacity in the trade route that includes shipping from China to the United States.
In 2011, ocean freight rates were dropping as carriers faced issues of overcapacity. The trade route from East Asia to the West Coast of North America especially saw falling freight rates.
For shippers who import from China to the U.S., this was great news. Lower freight rates meant lower costs and more opportunity for profit.
Lower freight rates meant the opposite for carriers. Their fleets of cargo container vessels dropped in value by billions of dollars.
Heading into 2012, carriers made moves to cause pricing trends to increase in their favor for ocean freight rates on shipping cargo containers internationally, especially from China and the Far East to the United States and North America.
A couple weeks ago, Universal Cargo Management posted a blog about carriers imposing freight rate increases from China to the United States. The blog focused on fees and general rate increases that went into effect at the start of 2012 from carriers across the board; however, the blog also mentioned carriers removing capacity from the trade route.
As a freight forwarding company, Universal Cargo Management pays close attention to trends and data of international shipping to help us give our customers the best possible freight rates for importing and exporting cargo. One excellent source of data is ComPair Data and their quarterly World Liner Supply Reports. In ComPair Data’s most recent report, it’s easy to spot the fast one Evergreen Line just pulled on the rest of the carriers.
ComPair Data’s World Liner Supply Report Quarter Four 2011 revealed just over 10% of the weekly capacity was removed from the trade route running from East Asia to the West Coast of North America as carriers removed services.
Weekly capacity dropped from 292,315 TEUs at the end of 2011’s 3rd quarter to 260,702 TEUs at the end of the 4th quarter.
While it looked like all the carriers were removing TEU capacity, Evergreen Line – UAM sailed against the wind and added TEU capacity, increasing Evergreen Line’s market share by capacity in the East Asia to North America West Coast trade route from 6.76% in 2011 Q3 to 8.22% in 2011 Q4.
While most carriers saw small drops in their market share by capacity in the last quarter of 2011, there was one other shrewd player whose market share increased similarly to Evergreen. No surprise, it was Maersk. Simply by not removing any services on the trade route, Maersk increased from 9.34% to 10.54% of the trade route’s market share by capacity.
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