Independent ocean carriers are reducing their presence on the Transpacific trade as weaker spot rates weigh on the profitability of non-alliance services.
According to Sea-Intelligence, the share of capacity operated by carriers outside the major alliances has dropped to its lowest level in a decade.
The consultancy observes a 79% correlation between spot rate levels and capacity offered by non-alliance carriers. When rates are high, these players rapidly add capacity. When rates decline, they withdraw just as quickly.
Sea-Intelligence expects the share of these services to fall below 15% of total capacity available.
Alan Murphy, chief executive of Sea-Intelligence, said this elasticity shows that competition remains active on the Transpacific. Independent carriers adjust their presence according to the economic viability of the market.
Niels Madsen, vice president of product and operations at Sea-Intelligence, explained that round-trip transpacific services generally require six vessels. An alliance made up of three carriers can split the effort, with each member deploying two vessels. An independent carrier, however, must deploy all six vessels alone.
When demand or rates fall, the financial impact is therefore much heavier for smaller operators. As Madsen summarised, when rates decline, non-alliance carriers feel the pressure before larger alliance operators.
