Drewry calls on liners to exercise restraint when ordering new ships

DREWRY Maritime Research predicts that 1

21 January 2020 - 19:00

DREWRY Maritime Research predicts that 1.2 million TEU of container shipping capacity will join the global fleet this year, including 23 x 20,000-plus TEU mega ships for leaders Hyundai Merchant Marine, CMA CGM and Mediterranean Shipping Company.

According to Alphaliner data, the box fleet expanded by four per cent last year to 23.2 million TEU of capacity for 5,337 ships, resulting from 1.06 million TEU of newbuild deliveries against 207,000 TEU of ships sold for scrap.

Demand growth is anticipated to remain weak since the 'challenge' from the bloated orderbook is ever present, reported London's Loadstar.L

There were 253 blanked east-west sailings by the three major container shipping alliances last year, up from 145 void sailings in 2018. Drewry said carriers have become 'very adept at switching capacity around and hiding it when necessary.'

Indeed, one unnamed carrier source told Loadstar the line intended to be 'more aggressive' in its blanking programme this year.

'We cannot afford to let it [supply] get out of control again this year, and we must not be fooled again by over optimistic assessments for the peak season,' he said.

'If we don't have enough ships, so be it, but at least those that do sail will make some money,' he added.

Moreover, with some 250 vessels for two million TEU of capacity either being retrofitted with scrubbers or awaiting their turn to enter dry docks, supply will continue to be skewed, at least in the first half of the year, paving the way for ocean liners to phase-in newbuilds while incumbent vessels are out of service.

But longer-term, Drewry, suggests shipping lines will need to be 'more ruthless on demolitions and remain restrained when it comes to ordering new tonnage.'

Another factor that could put a brake on the orderbook is the uncertainty across the industry over the strategy required to reach carbon-neutral targets.

'Deciding on the most suitable ship propulsion alternative will, understandably, take time, and the longer carrier executives take to consider and delay investment in new ships, the more time the industry will have to reduce its capacity surplus,' said Drewry.

'The container industry is now battle-hardened to cope with yet another challenging and unpredictable year. Much like last year, carriers should be able to return solid, if unspectacular, results and continue to prepare the ground for a better future,' it said.


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