WITH 120 newbuildings of 10,000 TEU+ (averaging 14,000 TEU) due to be delivered by 2017, there is ample overcapacity to launch a dozen more Asia-Europe strings, according to Braemar Seascope.
The shipbroker's latest report "underlines the essential nature of the new mega-alliances currently being planned for implementation in the year ahead".
The current emphasis towards consolidation "will strengthen and increase" as the industry tackles the challenge of overcapacity that is hitting the container market hard, the report said.
"Without such consolidation, rapid freight rate deflation would likely continue unabated. No doubt it will assist in rationalisation of liner deployment but like most things it has the potential to be a double edged sword," the firm cautions, reported Lloyd's List.
Without allowing for the effects of slow steaming and lay-up, "overcapacity is currently running in the region of 30 per cent, an unsustainable level which is bedded in for the next three years."
"Liner operators have no alternative [other] than to slow down loops whilst absorbing the relentless conveyor belt of post-panamax newbuildings hitting the water."
To make matters worse, the scope for additional newbuilding delivery deferrals will become more difficult to negotiate, as shipyards forward cover thins out noticeably towards the end of 2016, the report said.
During the first quarter, an estimated 40 vessels were delivered with a combined capacity of 350,000 TEU, and 1.7 million TEU of fresh capacity is due to be delivered this year.
"Net fleet growth for 2014 is estimated to be in the region of 6.7 per cent. In 2015, it is more of the same in terms of containership fleet growth, with an expected net fleet expansion of 7.2 per cent."
Containership demolition now plays a vital role in supply management, the broker notes, and expects 500,000 TEU of cellular capacity to be demolished in 2014, accounting for three per cent of the trading fleet at the start of 2014.
Looking ahead it said, "With cost effective vessel management and restrained and strategic containership ordering, the container industry should finally be able to move towards a more positive future."
OPINION
04 May 2014 - 22:44
Enough boxship overcapacity to start 12 Asia-Europe strings by 2017
WITH 120 newbuildings of 10,000 TEU+ (averaging 14,000 TEU) due to be delivered by 2017, there is ample overcapacity to launch a dozen more Asia-Europe strings, according to Braemar Seascope.
OPINION
04 May 2014 - 22:44
Enough boxship overcapacity to start 12 Asia-Europe strings by 2017
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