Carriers must lay-up many more ships to restore profitability to rates
Container shipping tonnage must be reduced at a far more than it was even in the turnaround year of 2009 if there is to be a real freight rate recovery, says Denmark’s SeaIntel Maritime Analysis..
But SeaIntel said the rate of cellular tonnage withdrawal in the nine trade covered by the Shanghai Containerised Freight Index (SCFI) is below that level except on the transpacific, reports Lloyd’s Loading List.
The idle box fleet stands at 303 vessels, or 5.9 per cent of the total fleet, representing 3.8 per cent, or 746,014 TEU of total containership capacity, latest data from Lloyd’s List Intelligence showed.
“With 1.7 million TEU having been delivered in 2015 and global demand growth in the range of 0 per cent, it is clear that more substantial idling of tonnage would be necessary for a recovery,” SeaIntel said.
“If we were to see a resurgence of rates in 2016, this would have to be driven by a much more substantial idling of capacity post-Chinese New Year [February 8],” SeaIntel said.
“This means that in order to stage a more sustained recovery, a large part of the fleet would have to remain idled – something the carriers did not manage to do in 2010.”
French consultancy Alphaliner reported that the idle containership fleet stood at 306 vessels representing 1.33 million TEU as of December 14, down 70,000 TEU compared with a fortnight earlier – the first decrease since July – and mostly the result of increased scrapping.
London’s Drewry Maritime Research said in December that the size of the idle fleet went up 52 per cent to 900,000 TEU in November 2015 from the previous month. The idle vessels accounted for 4.6 per cent of the world’s fleet as of November.
Drewry said the idle fleet peaked in 2009 when as much as 1.4 million TEU worth of ship capacity, then representing 11 per cent of the world fleet, was laid up.
When freight rates bottomed out in 2009, carriers sought to idle vessels in the range of 10-15 per cent of the global tonnage, according to SeaIntel.
As a result, rates surged in 2010 and the year saw the highest freight rates recorded for eight of the nine deep sea trades covered by the SCFI as well as the biggest increase in the average freight levels.