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Drewry: Capacity floods Asia-South America

Overcapacity and the insertion of new tonnage on Asia-Europe is now starting have a critical impact on other strings. According to British Drewry, the capacity between Asia and the East Coast of South America has increased by 33 percent in three months.

"Cascading" has been lying low for a long time as yet another negative consequence of the overcapacity on Asia-Europe combined with the new mega ships inserted into the most important string in the world. According to Drewry, a massive amount of tonnage has been inserted on the string between Asia and the coast of South America in recent months, a result of the fact that the shipping companies are getting a surplus of ships on their hands. The problem is that there's isn't necessarily a market for the ships on the other strings, meaning that the extra ships cause even more overcapacity, thus pushing the rates down.

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