Alphaliner: 2020 was a year of soaring rates, Covid, market discipline
THE global container fleet grew 2
27 January 2021 - 19:00
TEU capacity reached 23.9 million TEU as of January 1, compared with 23.2 million TEU below predictions made at the start of the year, and marks the first time growth has dropped under three per cent since 2016, when the container fleet expanded by just 1.8 per cent.
The fleet recorded growth of four per cent in 2019, said Alphaliner in its annual review. 'Ship deliveries were the main cause. Capacity delivered into the market fell 21 per cent to just 134 units of 839,842 TEU in 2020, lower than forecasts. And whiledeliveries outpaced demolition for the third year running, they remain significantly lower than the peak of 1.73 million TEU handed over in 2015.
But despite fears of a market collapse at the time of the Covid outbreak, 2020 concluded with a significant increase in ordering activity. TEU contracted rose 29.6 per cent to 1,015,838 TEU, equivalent to 98 units.
In contrast to vessels delivered, where the mean size of vessel actually fell, the average unit size ordered rose from 8,080 TEU in 2019 to 9,325 TEU in 2020.
Average contract sizes have now increased more than two and half times in just four years, with 2020's figure comparing to 2016's average of 3,739 TEU.
The heavy influx of tonnage and owners' reluctance to commit to new vessel orders at a time of uncertainty saw the orderbook-to-fleet ratio fall to its lowest level in 20 years, bottoming out at 8.2 per cent in October 2020.
In the last quarter of 2020 however, a number of major carrier-backed orders for mega ships finally reversed this trend and pushed the ratio back above the 10 per cent mark.Scrapping activity, meanwhile, was little changed on the previous year despite Covid fears. The poor market seen after the outbreak of the pandemic did not persist long enough to impact demolition, and deletions fell by just one per cent to 205,447 TEU during 2020, said Alphaliner.
Once spot rates started to climb from June onwards, owners had no incentive to go to the scrapyards.
Elsewhere, 2020 was a year of highs and lows for the containership market, with the initial gloom created by Covid quickly replaced by the euphoria of a cargo rebound. Carrier conditions were further boosted by sustained capacity discipline.
By year end, the idle fleet registered just 230,000 TEU, a fall of 83 per cent year on year, reflecting the intense demand for tonnage.
Meanwhile, freight rates soared. The Shanghai Containerised Freight Index averaged 30.8 per cent higher in 2020 than 2019. By year end, the index was up 243 per cent on the same period a year previously, logging an all-time record of 2,783 points on December 31.
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