Experts foresee weak rates on major trades as overcapacity clings on
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Experts foresee weak rates on major trades as overcapacity clings on

THERE is no end in sight to overcapacity brought on by the advent of mega ship, a leading shipping analyst warns.

01 May 2017 - 20:00 - Update: 02 May 2017 - 02:15

Top Alphaliner consultant Tan Hua-Joo, told delegates at the recent TOC Asia Container Supply Chain event in Singapore that there is more bad new to come.Despite 2016 being the "most balanced year in terms of supply and demand since 2009," with a global fleet growth of just 1.6 per cent, hopes for stability are some way off, he said.

Mr Tan told delegates that the cause was vessel delivery deferrals, combined with unprecedented scrapping levels and an unnaturally large idle fleet because on the Hanjin collapse.

"As we move into this year the rate of growth in the global fleet is going to increase as there is very little room for the industry to keep the growth of fleet down," he said.

But Maersk Line's man in the Asia-Pacific region, Robbert van Trooijen, disagreed, saying 2017 was the year "all of us would find balance".

Alphaliner is forecasting total fleet delivery of 1.32 million TEU, most of which will be new mega ships, and although it is also forecasting another year of record scrapping levels - up to 700,000 TEU - there will still be a net increase in the global fleet of 620,000 TEU, which would represent a 3.1 per cent increase.

Altogether, 1.6 million TEU of the global fleet was idled last year, yet, some 500,000 TEU of this was operated by bankrupt Hanjin Shipping's tonnage.

"A lot of the Hanjin vessels have been brought back into operation and panamax vessels have seen something of a spike in demand due to the new alliances' demand for capacity, leading to charter rates going back up to around US$10,000 per day," Mr van Trooijen said.

"The idled Hanjin tonnage is now down to about 200,000 TEU, and we expect this be reintroduced to by May.

"So as long as the shipping lines take back this idle capacity there is no sign of a recovery in the market as carriers continue to bid for market share and significant freight rate stability will continue.

"In fact, we do not see a genuine recovery in the freight markets for another 18 months - it is not until 2019 that the supply-demand situation comes back into balance," he said.

 

 

 

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