Active container ship capacity around the world is up 10 percent over the past year, running ahead of cargo demand and putting pressure on freight rates and vessel utilization levels in a lackluster peak season, according to industry analysts Alphaliner. Thursday, 04.Aug.2011, 00:42 (GMT+3)
Active container ship capacity around the world is up 10 percent over the past year, running ahead of cargo demand and putting pressure on freight rates and vessel utilization levels in a lackluster peak season, according to industry analysts Alphaliner, the Journal of Commerce reports.
Carriers have boosted capacity on all routes, with the secondary line haul markets in South America and Africa seeing the largest percentage increases, the container market analyst said.
The worldâ€™s active fleet reached 14.95 million 20-foot equivalent units on August 1, an increase of 1.33 million TEUs over the past year.
Carriers that have withdrawn capacity on the main Asia-Europe and Asia-North America trade lanes have largely redeployment vessels to secondary routes.
As a result, capacity on African routes jumped 20 percent during the past year. Trans-Atlantic and Latin American trade lanes saw capacity increases of 14 percent and 13 percent, respectively.
Despite capacity cuts, the Far East-Europe route remains under pressure from a 12 percent year-on-year increase in supply, with 430,000 TEUs added on those lanes. The arrival of new vessels there has increased weekly capacity by 32,000 TEUs to 400,000 TEUs, accounting for a third of the total worldwide increase in capacity in the past 12 months.
With cargo demand growth slowing, vessel utilization remains weak. â€ťOver the past 12 months this has put considerable pressure on freight rates,â€ť Alphaliner said.
All ultra-large container ships delivered in the past year were deployed in the Far East-Europe trade lanes despite average utilization levels of only 84 percent in the first half of 2011, according to Alphaliner estimates.
The trans-Pacific route saw a relatively modest 6 percent hike in capacity due partly to recent withdrawals. But utilization levels still remain weak due to lackluster demand growth since December.