The shipping company doesn't stop sailing?Container capacity is expected to break records in the fourth quarter

Container capacity on transpacific routes is expected to hit a record in the fourth quarter of this year, despite fears of a deepening recession and weak consumer demand.

Sea Intelligence analysts say: The current pattern of capacity growth on Pacific routes breaks the usual pattern of tightening in the third quarter and then increasing in the fourth quarter.

According to Sea Intelligence, capacity on us east and West Coast transatlantic routes will reach a rolling average of 500,000 teUS per week for eight consecutive weeks by the end of 2020.Liner companies' capacity launches usually drop after the Spring Festival and recover during peak season, but the trend in 2020 was amplified by the epidemic.This year's capacity levels briefly returned to 2015 levels, wiping out five years of market growth, before surging in response to surging demand, pushing capacity higher in the same period than in 2019.Current Pacific line capacity levels are up 20 per cent year on year.

Instead of holding back capacity in an effort to raise rates, container liner companies have not only restored it, but even increased it at a rate rarely seen in history, according to Sea Intelligence.This may be due to concerns that liner companies will not be able to ramp up capacity quickly enough to keep pace with demand when it recovers.In addition to the Pacific, asia-Europe and Asia-South America routes are also recovering capacity.Sea Intelligence says,

Assuming that this capacity increase matches the expected underlying demand in the fourth quarter, this would indeed be an unprecedented change.For other markets, 7-10 per cent demand growth would be relatively high even in a normal year, and all indicators point to a global recession in 2020.

Most believe that the current freight boom is unsustainable, and that 20% growth in demand in a recession is likely to be achieved in the short term, but not in the long term.