Following last week’s Q2 round-up of Xeneta and Marine Benchmark’s Carbon Emissions Index (CEI), in which Ocean Network Express (ONE) took top spot, we begin our next dive into data across the world’s major lanes.
This week we will look at what Q3 brought in carriers’ performance and emissions on the Far East to North Europe trade.
With just over two months before the EU Emissions Trading Scheme (EU ETS) comes into force and ships are given their first official ranking on the IMO’s Carbon Intensity Indicator (CII), scrutiny of environmental performance is more intense than ever.
Q3'23 CEI Carrier Ranking
Far East to North Europe
|10||Orient Overseas Container Lines (OOCL)||106.5|
Ships on the Far East to North Europe trade are perhaps insulated from the new regulations more than most and will not have to adjust operations to achieve a compliant CII rating. This is because they tend to be younger, more efficient vessels and are deployed on a trade with long sailing distances and less time spent in port.
However, no matter how efficient these younger vessels are, they will still be liable for CO2 emitted on this trade. Carriers will try to pass the extra costs from the EU ETS on, meaning for the first time, shippers will have to pay for at least part of the emissions resulting from the transport of their goods.
The Far East to North Europe trade has attracted a lot of attention during 2023 due to the overcapacity on this lane and, once again, ONE takes top spot in the Xeneta CEI during Q3. Furthermore, ONE’s rating of 64.7 for Q3 is 29.3 index points lower than they achieved on this lane in Q2.
When we look a little closer, we see ONE has increased the size of its fleet between Far East and North Europe, averaging 15 400 TEU in Q3 2023. Not only are these are the biggest ships ONE has ever deployed between Far East and North Europe, they are also the youngest vessels they have utilised on this trade since Q2 2021, with an average age of 9.3 years.
When we add the fact ONE has decreased its average speed from Q2 to Q3 by 1.5%, and now sails below just below the average for this trade at 1.5% knots, it becomes clear why they have retained top spot on the Xeneta CEI.
The overall CEI for the Far East to North Europe trade in Q3 was 86.2 – the lowest it has been since Q2 last year. One factor that stands out on this trade is the increase in capacity, which has been a consistent theme for this lane. Just as ONE is deploying bigger ships than ever before, the average size of ships across all carriers on the Far East to North Europe trade is a record high.
Far East to North Europe is one of the few trades that can accommodate new ships of over 20 000 TEU. In Q3, ships on this trade had an average capacity of over 19 000 TEU, and with vessels of this size tending to be younger, the average age fell to 6.6 years – the lowest it has been on the trade since the Xeneta CEI began.
In September more than half of vessels that set sail between Far East and North Europe had a capacity of 20 000 TEU or more and just a handful had a capacity of less than 12 000 TEU.
The average capacity of ships on this trade lane therefore increased by 14.6% from Q2 to Q3, but this increase brings challenges, as demonstrated in a decrease of 1.4 percentage points in average filling factor. However, despite this decrease and the challenging market conditions, carriers have been able to maintain a stable filling factor with an average of more than 90% since Q2 2021.
The Xeneta CEI provides clarity and visibility on carriers’ emissions, allowing shippers to put environmental sustainability at the heart of their decision making. As we head towards new regulatory requirements in 2024, make sure you stay in the know through our regular deep dives into carrier performance on the Xeneta CEI.
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