SHIPPING industry association BIMCO has expressed concerns that low bunker fuel costs may encourage container shipping lines to ramp up the service speed of vessels, effectively adding more capacity to already bloated trade lanes.
Ocean liners have been practicing slow-steaming to lower fuel consumption when oil prices were soaring, as well as to deploy more ships without increasing capacity.
BIMCO noted in its latest container market analysis that "speed has gone up" across all sectors in container shipping, now that fuel is much cheaper - bunker costs have dropped by 50 per cent in the past year.
Indeed, IFO 380 is currently being quoted in Rotterdam at US$110 per tonne down from$600 per tonne two years ago, reported London's Loadstar.
One advantage of increasing a ship's service speed is that it provides a buffer for shipping alliances to add extra direct port calls to liner schedules, thereby gaining a market advantage over rivals.
BIMCO said that container demand in 2015 had been "sluggish," while supply growth had jumped by "an astonishing" 8.1 per cent.
"We are not making it easy for ourselves," it bemoaned, adding that it was little surprise the system of cascading had broken down, as trades were "already awash" with underutilised ships.
Following the injection of 208 ships for a record 1.67 million TEU of capacity last year, BIMCO forecasts there will be 850,000 TEU of newbuild deliveries this year mainly because owners and investors had managed to postpone 30 per cent of the delivery dates on shipyard orderbooks.
To restore balance to the supply-demand equation this year, BIMCO argued that container demolitions would need to reach 444,000 slots, similar to the scrapping record set in 2013. In 2015 containership deletions amounted to 200,000 TEU.
Furthermore, to improve the supply-demand balance, European retailers and wholesalers would need "to stop running down inventories and start importing containerised goods again, " said BIMCO, "the sooner the better. " Nonetheless, BIMCO does expect an upside from US imports this year, due to its improving economy and consumer demand.
WORLD SHIPPING
04 February 2016 - 14:22
Cheap bunker may lead to faster vessels increasing capacity: BIMCO
SHIPPING industry association BIMCO has expressed concerns that low bunker fuel costs may encourage container shipping lines to ramp up the service speed of vessels, effectively adding more capacity to already bloated trade lanes.
WORLD SHIPPING
04 February 2016 - 14:22
Cheap bunker may lead to faster vessels increasing capacity: BIMCO
This news 6080 hits received.
These news may also interest you