As ports in Asia and Europe become congested following Houthi attacks on shipping, shipping lines are expanding their direct calls to absorb excess capacity and maintain schedules.
An analysis of vessel deployments and new services by consultancy MDS Transmodal shows that carriers are deploying vessels on direct services with fewer port calls to avoid delays due to congestion, helping them to better maintain schedules.
Analyst Antonella Teodoro said: “Data from the past year shows a trend towards direct services in deepsea shipping, with a clear ‘pause’ in the hub-and-spoke model. The resilience of smaller vessels and the strategic deployment of capacity to non-hub ports highlight the industry’s adaptive strategy to respond to changing market demands against the backdrop of the ongoing Red Sea crisis.”
Increased journey times, mainly due to rerouting from the Bab el-Mandeb Strait via the Cape of Good Hope, and a reduction in the number of ports in service rotation support the view that carriers have made a limited but significant shift away from the hub-and-spoke strategy.
As shown in the chart below, fleet capacity has continued to grow faster than scheduled deployment capacity since around the fourth quarter of 2022, with the gap between the two widening.
This shift raises the question, Teodoro added, “Is this due to a preference for a hub-and-spoke model or a move to more direct services?”
According to MDS Transmodal analysis, the capacity deployed this year and the number of rotation ports, shown in Figure 2, reveal some significant changes since July 2023.
The chart shows that capacity calling only three to seven ports has increased by 17%, or 400,000 TEUs to 2.8 million TEUs, and now accounts for 25% of total capacity (previously 22%); rotation capacity involving 8-12 ports has increased by 6%, from 300,000 TEUs to 5.1 million TEUs, accounting for 46% of total capacity, up from 44%.
However, loop capacity on services with 13 ports or more fell by 11%, or 400,000 TEUs, to 3.2 million TEUs, and as a share of total capacity fell from 33% to 29%.
“Drilling down to the port level, the capacity deployment of the world’s 25 major hub ports (mostly transshipment ports) shows that the number of hubs with standing capacity increases is lower than the number of hubs with annual capacity declines on every service offered,” Teodoro explained.
