Container Ship Newbuildings: Supply May Outstrip Demand

MarineLink.com
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 Reporter August 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Syncrude Uncertain about Plant Fire Affecting Production

The operator of Canada's largest synthetic crude project said on Saturday it is investigating the causes of an early morning fire at an upgrading plant. Firefighters extinguished the blaze,

Hurricane Ignacio Gains Strength but Expected to Bypass Hawaii

Hurricane Ignacio intensified as it blew across the Pacific on a route likely to bypass Hawaii on Saturday, said the Central Pacific Hurricane Center of the National Weather Service.

United Heavy Lift Gears up for the Asian Boom

All set to expand its footprint in the South Asian market significantly, Hamburg based, United Heavy Lift (UHL) appointed strategically placed Lexicon Overseas Pvt Ltd.

Contracts

United Heavy Lift Gears up for the Asian Boom

All set to expand its footprint in the South Asian market significantly, Hamburg based, United Heavy Lift (UHL) appointed strategically placed Lexicon Overseas Pvt Ltd.

China Passes New Pollution Law, Will Cap Coal Consumption

Legislators have approved amendments to China's 15-year-old air pollution law that grant the state new powers to punish offenders and create a legal framework to cap coal consumption,

Gazprom, OMV Meet on Establishing Nord Stream JV

At a Meeting held at the Gazprom headquarters between Alexey Miller, Chairman of the Company's Management Committee and Rainer Seele, Chairman of the Executive Board of OMV,

Shipbuilding

MN 100: ContainerTug B.V.

The Company: ContainerTug B.V. is a specialized Dutch naval design engineering and construction company with a strong focus on developing workboats and the evaluation

Oman Drydock Company Expands Rapidly

Oman Drydock Company (ODC) is growing fast. In January, the yard hit an important milestone - its 300th drydocking. Harnessing the power of its new $1.8 billion, 1.

NASSCO Invests in Facilities, Equipment and People

General Dynamics NASSCO has invested several hundred million in capital projects as part of its efforts to increase efficiencies via  modular shipbuilding, including:

Finance

TASI Acquires SignalFire Telemetry

TASI HOLDINGS INC. announced today it has completed the acquisition of all shares of SignalFire Telemetry, located in Hudson, Massachusetts.  This new acquisition

DP World Profit Up 22%

Global marine terminal operator DP World today announced strong financial results from its global portfolio of marine terminals for the six months to 30 June 2015,

Med Crude-Russian Urals Edges Lower in Med, Baltic

Russian Urals crude weakened in the Mediterranean and in the Baltic on Friday, while trading activity was limited ahead of a long holiday weekend in Britain, traders said.

Container Ships

Marad Celebrates Deployment of Maritime Fuel Cell Project

The U.S. Department of Transportation’s Maritime Administration (MARAD) today celebrated the launch of field trials for the first prototype hydrogen fuel cell

DP World Profit Up 22%

Global marine terminal operator DP World today announced strong financial results from its global portfolio of marine terminals for the six months to 30 June 2015,

MN 100: ContainerTug B.V.

The Company: ContainerTug B.V. is a specialized Dutch naval design engineering and construction company with a strong focus on developing workboats and the evaluation

Logistics

United Heavy Lift Gears up for the Asian Boom

All set to expand its footprint in the South Asian market significantly, Hamburg based, United Heavy Lift (UHL) appointed strategically placed Lexicon Overseas Pvt Ltd.

World’s Quickest Trip Through Northern Sea Route

Chinese sailor Guo Chuan intends to make it world’s quickest Northern Sea Route trip from Murmansk to the Bering Strait in 14 days without engine power. His

Gazprom, OMV Meet on Establishing Nord Stream JV

At a Meeting held at the Gazprom headquarters between Alexey Miller, Chairman of the Company's Management Committee and Rainer Seele, Chairman of the Executive Board of OMV,

 
 
Maritime Careers / Shipboard Positions Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
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: 0.5954 sec (2 req/sec)