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Why NOL's efforts to control capacity may be wavering
Despite route reduction schemes.
According to OCBC, aside from the substantial capacity adjustments back in late 2011, efforts to control capacity since then have waned despite initiatives by alliances to reduce routes, and this has led to a negation of general rate hikes implemented in Jan and Apr this year.
"Although there has been the recent formulation of a P3 alliance between the world’s three largest container liners (Maersk, CMA CGM and Mediterranean Shipping Company), it will only commence from 2Q14 and impact mainly the AsiaEurope trade route (of which NOL has ~15% top-line exposure)," OCBC said.
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