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More ship deliveries mean more overcapacity and more lay-ups: Alphaliner

ALPHALINER, the French research house, has warned that the "ongoing race" between carriers to have the lowest unit cost by having the biggest ships would add more overcapacity, due to the high number of mega ships to be delivered in the coming years.

For many owners, said Alphaliner, there appears no option but to lay-up ships, continuing the trend of 2015 which saw the idle containership fleet swell five-fold to 1.36 million TEU - or 6.8 per cent of the global fleet.

Already there are signs that there are too many mega ships as they represent 24 per cent of the cellular order book, and are usually restricted to Asia-Europe routes, notwithstanding the docking of the 17,859-TEU CMA CGM Benjamin Franklin on the US west coast.

To obtain the lowest unit cost, thus to offer the lowest rate in the market, carriers must achieve high load factors as the call goes out to sales teams: "Fill the ship at all costs".

One carrier told London's Loadstar recently that to efficiently service the trade it ideally needs a combination of different-sized ships between Asia and north Europe, rather than a one-ship-fits-all mega-ship fleet.

Moreover, notes Alphaliner, there were 52 units of 10,000-13,300 TEU ordered last year, albeit that these ships could be deployed on services going via the enlarged Panama Canal after it opens.

Meanwhile, according to Alphaliner's latest data, the world's cellular containership fleet had by the end of 2015 reached a total slot capacity of 19.9 million TEU, up 8.5 per cent year on year.

A record 214 new containerships entered the market last year, adding 1.72 million TEU to the fleet. However, according to data from shipbroker Braemar ACM, there were just 93 vessels, or 213,000 TEU demolished last year, as scrapping prices declined as a result of the global steel glut.

The consequence of reduced scrapping for the container shipping industry as well as other shipping sectors is that charter rates have begun the year under severe pressure again.