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Rising excess shipping capacity risks blighting record profits

LADEN containers will break volume records this year as profits soar, but the industry still carries crippling surplus capacity as the active fleet growth hits nine per cent, reports IHS Media.

Japan's MOL posted the biggest year-on-year Asia-Europe increase from July through September, up 61.7 per cent to 291,000 TEU. 

But as volume and profits grew, so did capacity. Paris research house Alphaliner said the global fleet reached 21 million TEU on November 2, taking almost 22 months to grow from 20 million TEU. 

Growth from 2000 to 2015 averages out to a million TEU a year. Only 230,000 TEU has been scrapped since March, while 930,000 TEU has been delivered. 

While NYK and OOCL moved more boxes at 298,000 TEU each, they experienced 36.1 per cent and 24.7 per cent respectively. Wrongway Cosco's Asia-Europe volume fell 6.2 per cent to 928,000 TEU - carriers' only decline.

Drewry port data is almost 10 points above the same month of September last year. 

September figures reveal widespread volume growth, with North America, up 12.6 per cent, Latin America up 11.1 per cent and China up 10.3 per cent, but Europe only up 4.4 per cent.

In the third quarter, CMA CGM saw the largest increase in laden volume, growing 56 per cent year on year to 4.98 million TEU.

But this was because of the addition of recently acquired APL volume. HMM also saw strong volume growth of 46 per cent year on year to 986,022 TEU, but this was because it fed on the leavings of bankrupt Hanjin Shipping.

Hapag-Lloyd grew 44 per cent from 1.9 million TEU in the third quarter of 2016 to 2.8 million TEU in 2017. 

Copenhagen research house SeaIntel said growth was driven by more than a doubling of the amount of cargo transported to and from Asia as the carrier clearly benefited from the acquisition of UASC.

But troubling capacity is likely to rise, as IHS Markit forecasts net growth in the global fleet of 7.1 per cent if no deliveries are made of the 78 mega ships over 10,000 TEU totalling 1.2 million TEU. 

The fleet would expand 5.6 per cent if a quarter of deliveries are pushed back.
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