Container Ship Newbuildings: Supply May Outstrip Demand
Tuesday, December 10, 2013
Photo courtesy of APM

Ocean carriers have a pool of surplus 8,000-10,000 teu vessels looming ahead unless some thinking ‘outside of the box’ is behind recent newbuild orders, considers Drewry Maritime Research in their latest 'Container Insight'.

Supply side
Ocean carriers have returned to ordering vessels between 8,000-10,000 teu in large numbers, suggesting that either overcapacity is brewing ahead, or unusual service developments are in the pipeline. By the end of this year, 55 vessels averaging 8,600 teu will already have been delivered, increasing the sector’s capacity by a remarkable 18%, well ahead of global cargo growth, and a further 40 are due for delivery next year, which will increase it by another 11.6%. Moreover, 45 more are due for delivery in 2015, adding yet another 11.6%  y-on-y growth.

On top of this, say Drewry, around 20 existing vessels in the size range are due to become surplus to requirements once Maersk Line’s, MSC’s and CMA CGM’s Asia/North Europe services are merged in 2Q 14

To make matters worse, another 44 vessels averaging 14,638 teu are due for delivery next year (further postponements excluding), which will most probably lead to the same number of vessels between 8,000 teu and 10,000 teu being displaced.

Demand side
On the demand side of the equation, the P3 alliance will probably need at least 30 of the units for its five Transatlantic services from 2Q 14, as made clear in last week’s Med-North America Supply/demand trade route analysis, and the previous week’s analysis of the North Europe-North America tradelane, although Maersk/MSC/CMA CGM’s intentions have yet to be confirmed, and it is still unclear what schedules are to be replaced.

Because its competitors will be unable to compete with the economies of scale offered by these bigger transatlantic ships – the average between Northern Europe and North America and between the Mediterranean and North America is just 4,000 teu and 4,800 teu respectively – they will presumably have to follow suit, but it remains to be confirmed how this will be done.

The G6 vessel sharing alliance (APL, Hapag-Lloyd, MOL, HMM, OOCL, NYK) has so far only clarified that its geographic scope is to be extended to the tradelane, as well as to the route between Asia and WCNA. No service rationalisation has been mentioned.

Ignoring this possibility, supply of vessels between 8,000 teu and 10,000 teu looks set to well exceed demand growth, therefore, so where the excess will be deployed is intriguing. As explained in ‘North-South lanes reaching saturation’, there is no immediate home for the vessels outside of the east-west tradelanes, which is where the 21 units ordered by Hamburg Sud, CSAV and CCNI will presumably be deployed.

The opening of the Panama Canal’s expanded locks at the end of 2015 will open up many new possibilities, although, here again, nothing has yet been confirmed, so envisaging anything would just be conjecture. It is highly likely that many Asia/ECNA services will be upgraded from the current 5,000 teu restriction in 2016, however.

Drewry Maritime Research's View
The current order book of vessels between 8,000 teu and 10,000 teu appears excessive.

Source: Drewry Maritime Research

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

“Twiggy” Baker Wins BWT Puerto Escondido Challenge

Grant “Twiggy” Baker (ZAF) claimed victory today at the Puerto Escondido Challenge, besting a field of 24 of the world’s best big wave surfers in towering 20-to-35

Winners of International Seafarers' Welfare Awards

The winners of ISWAN's International Seafarers' Welfare Awards 2016 were announced on 24th June at a high-profile ceremony held in Manila, the Philippines. The

Maritime Needs More Women Power

United Nations  International Maritime Organization (IMO) Secretary- General Ki Tack Lim pushed for the increased involvement of women in the seafaring industry


ABP orders Two Gottwald cranes

Terex Port Solutions (TPS) has received an order from Associated British Ports (ABP) for two electric Terex Gottwald Model 8 portal harbour cranes in the G HSK 8424 B four-rope grab variant.

POSH Bags Shell FLNG Contract

Singapore’s offshore marine services provider PACC Offshore Services Holdings Ltd. (POSH) has been awarded a contract to support Shell’s Prelude floating liquefied

Baltic Index up for Third Straight Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Friday, for a third straight session, on rising demand across all vessel segments.


Austal Delivers LCS 8 to US Navy

Austal Limited (Austal) (ASX:ASB) delivered the future USS Montgomery (LCS 8) to the U.S. Navy, during a ceremony held aboard the ship at Austal USA’s shipyard in Mobile, Alabama, USA on 23 June.

Conrad Shipyard Forms LNG Business Unit

Conrad Shipyard has formed a new business unit focused on LNG projects.   Conrad, builder of North America’s first LNG bunker barge scheduled for 2017 delivery,

Prince Charles Places Final Section of UK Aircraft Carrier

The second of the largest warships ever built for the U.K. Royal Navy, the Queen Elizabeth Class carrier HMS Prince of Wales, was given the royal seal of approval when HRH The Prince of Wales,


VEB Guarantees $3 Bln of Yamal LNG Debt

Russian development bank VEB said on Friday it had provided a guarantee for $3 billion of debt to the Yamal liquefied natural gas (LNG) project, led by Russian gas firm Novatek.

US Oil Drillers Cut Rigs after 3 Weeks of Additions

U.S. oil drillers cut rigs this week for a 20th week this year after three weeks of additions, according to a closely followed report on Friday, as crude prices

World Stocks Tumble as Britain Votes for EU Exit

Global capital markets reeled on Friday after Britain voted to leave the European Union, with $2 trillion in value wiped from equity bourses worldwide, while money

Container Ships

MSC Jade Sails with MAN's Biggest Engine

The largest and most powerful engine from MAN Diesel & Turbo’s portfolio ever designed and built has entered service.   Built by Doosan Engine in Korea and rated at 75,

Slowing Shipping Fleet Growth to Ease Officer Shortage

Slowing growth in the size of the shipping fleet will reduce the shortage of officers over the coming years, according to the latest Manning report published by global shipping consultancy Drewry.

Kuriyama Joins Matson Board of Directors

The Board of Directors of Matson, Inc. has appointed Stanley Kuriyama as a director of the company, effective June 23, 2016.   Kuriyama is the Executive Chairman of Alexander & Baldwin, Inc.


More PPPs Needed to Enhance Dubai Maritime

The Marine Advisory Council has met to discuss the best ways to continue leading the march to excellence pursued by the Dubai Maritime Authority in upgrading the

210 Ships Pass Through Suez Canal Last Week

Suez Canal traffic data revealed that 210 ships transited the canal, with a total load of 12.8m tonnes, from 19 to 23 June.   An average of 42 ships transited the canal per day during that period,

Maersk Takes Coffee Very Seriously

Maersk acknowledges that coffee is very special, mainly in regards to the processes and requirements involved for it’s shipping. "So we have adapted the way we work so we can meet your needs,

Maritime Careers / Shipboard Positions Maritime Contracts Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1277 sec (8 req/sec)