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 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

BMW Opens Vehicle Distribution Center at Baltimore Port

BMW Group celebrated the official opening of its newest Vehicle Distribution Center at the Port of Baltimore yesterday. The facility will serve 96 dealers within

David Palacios is Director of Quality, Environment & Safety, SENER

The engineering and technology group SENER has brought together its Quality, Environment and Safety divisions into one unified Department. The move aims to reorganize

ICC Conference Focuses on Platform to Settle Disputes

The 5th ICC International Commercial Mediation Conference has brought together leading mediators, arbitrators, corporate managers and in-house counsel from around

Contracts

David Palacios is Director of Quality, Environment & Safety, SENER

The engineering and technology group SENER has brought together its Quality, Environment and Safety divisions into one unified Department. The move aims to reorganize

Nigerian Minister Pledges $1.3 bln for Power Companies

Nigeria's oil minister announced a 213 billion naira (1.3 billion US dollar) bail-out package for power companies on Saturday, nearly a year after the sector was privatised.

Rosneft says Exxon Still Continues to Work With it in Arctic

Russia's biggest oil producer Rosneft said on Saturday that Exxon Mobil was still continuing exploration drilling at their joint project in the Arctic Kara Sea.

Shipbuilding

Deep Sea Supply takes Delivery of 'Sea Triumph'

The Deep Sea Supply  took delivery of the newbuilding Platform Supply Vessel 'Sea Triumph'  on Thursday 18 September.  The vessels 'Sea Triumph' is a STX 05-L

Lilaas Engages Imtra for N. American Distribution

Strong prospects in the North American marine equipment market have triggered a new importation and distribution agreement between control specialist Lilaas

Ingram Barge Order 20 Tank Barges for 2015

Ingram Barge Company say they will be building 20 tank barges in 2015 to meet growing demand for chemical shipments. While most of the company’s recent tank barges have come through acquisitions,

Finance

Nigerian Minister Pledges $1.3 bln for Power Companies

Nigeria's oil minister announced a 213 billion naira (1.3 billion US dollar) bail-out package for power companies on Saturday, nearly a year after the sector was privatised.

Russia's Yamal LNG Project May Tap Wealth Fund in 2014

Russia's Novatek may get funds from the National Wealth Fund for its Yamal LNG project before the year-end, a minister said, as part of government plans to support sanction-hit companies.

ICC Conference Focuses on Platform to Settle Disputes

The 5th ICC International Commercial Mediation Conference has brought together leading mediators, arbitrators, corporate managers and in-house counsel from around

Container Ships

Chevron To Find Buyers for Hawaiian Refinery

Chevron Corp has hired an investment bank to identify potential buyers of its 54,000 barrel-a-day refinery in Kapolei on the Hawaiian island of Oahu, a company official said.

South Carolina Ports Container Volume Up by 13%

SC Ports Authority reported container volumes up 13 percent fiscal year to date, a strong start to the first two months of the fiscal calendar. The SCPA handled 163,

Global Ship Lease to Acquire Containership

Global Ship Lease, Inc. has  announced  that it has agreed to acquire a 8,063 TEU containership from a leading container liner company for a purchase price of $55 million.

Logistics

BMW Opens Vehicle Distribution Center at Baltimore Port

BMW Group celebrated the official opening of its newest Vehicle Distribution Center at the Port of Baltimore yesterday. The facility will serve 96 dealers within

Tropical Storm Polo Threatens Battered Mexican Resort of Los Cabos

Tropical storm Polo barreled nearer on Friday to the Mexican Pacific resort of Los Cabos where thousands of troops were restoring order following widespread

Chevron To Find Buyers for Hawaiian Refinery

Chevron Corp has hired an investment bank to identify potential buyers of its 54,000 barrel-a-day refinery in Kapolei on the Hawaiian island of Oahu, a company official said.

 
 
Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2309 sec (4 req/sec)