Majority New Transportation’s – Directed to East-West Trades in 2015
According to Drewry, the majority of the new vessels over 4,000 teu built in 2015 were sent to operate in the East-West trades. The average size of the ship on sailing by Asia-North Europe increased by 16% to 14,100 teu from the commencement of 2015.
In the route of Asia-West Coast North America (WCNA), 18,000 teu vessels have been pressed into service recently and the trade of Asia-East Coast South America (ECSA) observed an extremely high intake of new build vessels. Around 132,000 teu of newly built capacity has been added to the Asia-ECSA services in the past year, while the average growth of vessel size is by 19% to 8,800 teu.
“Considering that head haul demand growth in these two trades fell by 14.5% and 3.4% in 2015 respectively, that is an awkward position for carriers to be in and goes a long way to explaining why each route has experienced a lot of void sailings as lines tried to minimise the supply and demands mismatch”, the analyst explained.
Drewry reported that:
- 209 new vessels became operational in 2015, adding 1.7m teu to the global fleet’s capacity before any scrapping.
- The average size of the newly-built ships was about 8,400 teu and 55% of all vessels were transported in the preceding year were ships over 10,000- teu.
- Three largest carriers, Maersk Line, MSC and CMA CGM, were those which took maximum capacity in teu terms, whereas the five top carriers accepted two- thirds of all the new capacity.
- Although the intake of new builds 2016 will not be as high as in 2015, there will be another 1.3m teu to be absorbed, with the majority of new builds likely to again be big ships.
- New orders doubled in 2015 to an aggregate capacity of 2m teu ( 90% of which were 10,000 teu and above) that will have to find deployment before the decade is out.
- The recent slowdown is either a signal that owners have realised there is no demand right now for any more new ships and/or that financial pressure among carriers and non-operating owners is suppressing activity.
- The economic argument for requirement of bigger vessels is shrinking as they develop, and will actually converse upon reaching 24,000 teu as ports struggle to turn them around in an efficient way leading to a rise in costs.
- Carriers are running out of profitable trades to deploy the big vessels.
“If we’re right that the economic imperative and the financial ability to order these ships is decreasing we think there is a reasonable chance that the much needed breather from new orders will hold firm” the analyst added.