Service scrappings push idle box fleet up to worrying levels in 2018
THE containership market continued to be squeezed by overcapacity last year, dampening the initial optimism surrounding the sector's outlook
THE containership market continued to be squeezed by overcapacity last year, dampening the initial optimism surrounding the sector's outlook. Charter rates rallied in the first half but average rates plummeted from the second half onwards to end at levels lower than the preceding 12-month period.
Alphaliner figures show that ship deliveries reached 1.3 million TEU in 2018, surpassing the 1.2 million TEU of newbuildings that joined the fleet the previous year. Meanwhile, scrapping and other deletions dropped to a seven-year low with only 111,200 TEU wiped out during 2018, compared to the 427,000 TEU removed in 2017, reported Rotterdam's World Maritime News.
'These two factors, together with a handful of vessels that were jumboised during 2018, drove the total cellular fleet up by 5.7 per cent to reach 22.3 million TEU at the end of the year.'
The high net supply growth could not be matched by tonnage demand, prompting the idle fleet to balloon to 628,000 TEU by the end of 2018, compared to just 416,000 TEU a year earlier.
'For the first time since 2011 the idle fleet dropped to below 200,000 TEU in the first half of 2018. Later in the year, however, when weak operating margins forced carriers to slash capacity on various trade lanes, the idle fleet crept up again,' noted Alphaliner.
The increase of the inactive fleet was driven largely by four service withdrawals on the transpacific route in July and the temporary suspension of one high-capacity Asia-Europe string in September.