After four months of relentless falls in the headhaul spot rates, carriers are now being forced to reduce capacity on the westbound Mediterranean – Asia trade, and the cuts could lead to spot rates improving in the peak season at least, according to UK-based shipping consultant Drewry.During the first quarter, Asian exports to the Mediterranean declined by 1.8% year-on-year and in April a further drop of 9.9% was recorded.The market that has suffered most is the Black Sea – accounting for some 12% of the total trade last year – with Q1 westbound hauls sinking by 26%, Drewry says.It was the mature West Mediterranean markets that powered much of the growth in the overall westbound trade last year, but recently the fall in the value of the euro has dampened that recovery, according to Drewry.The need to restore the westbound spot rates in July is no less pressing in the Mediterranean trade than it is in North Europe, and the action to trim capacity during the third quarter by both 2M and Ocean Three, who together provide over 70% of the capacity on this route, is a clear enough signal to the market that they are intent on rectifying what has taken place in the last four months. Removing slots during what is the main peak season in the calendar is virtually without precedence, says Drewry.The earlier influx of additional capacity, which by May was registering almost 15% compared to what was provided a year ago, and which was largely due to the formation of 2M and Ocean Three, was simply too much for the headhaul trade to digest. Vessel utilisation had drifted down to the low eighties, sometimes even lower.2M will downsize the 9,500 teu tonnage deployed on its Condor/AE9 loop which calls Barcelona and Tanger Med en route to North Europe, and the substituted 6,500 teu ships will skip the Mediterranean ports.Ocean Three has cancelled the MEX1 sailing (9,000 teu vessels covering the West Mediterranean) in both weeks 28 and 31, while BEX (9,500 units serving Beirut, Turkey and the Black Sea) is withdrawn in week 30.The actions taken by the two alliances are reckoned to strip out about 7.5% surplus capacity in July, and one might assume that Ocean Three may be considering applying the same measures in August and September if demand so dictates, Drewry says.The decimation of the westbound spot rates in the last four months has been even more horrendous in the Asia-Mediterranean trade than in the North Europe market. During the pre-Chinese New Year peak season, the open market rates were hitting USD 2,600 per 40ft; towards the end of June, quotes of USD 500 could be obtained and any attempts along the way to impose the declared monthly rate increases mainly fell on deaf ears, according to Drewry.At this same point one year ago, sea freight quotes were no lower than USD 3,000. For much of 2014, spot cargo moving to the Mediterranean base ports commanded a premium of USD 500-600 over similar parcels heading for the North Continental terminals. Today, that differential has shrunk back to scarcely more than USD 100.The severe haemorrhaging of open market rates has inflicted more pain on the carriers in the Mediterranean trade because there is a lower proportion of fixed-term service contract cargo moving than in the North Europe market, Drewry says.Increases being sought with effect from July 1 range from USD 900 to USD 1,300 per teu and it is imperative that a good chunk of this sticks if the carriers’ contract customers, whose terms are over USD 1,000 per 40ft higher than the current spot rate, are not to be totally alienated.