2017 Could Break Record High Box Ship Scrapping Levels Set in 2016

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Alphaliner, in its latest weekly report, says 2017 could be a record year for container ship scrapping, with projections suggesting that as much as 750,000 TEU could be on track for demolition.

The new projections come just weeks after it was reported that 2016 already saw a record high volume of container vessel scrapping.

“A total of 42,000 TEU has already been removed from the fleet in the first three weeks of this year, with a further 113,000 TEU due to follow in the coming weeks,” stated Alphaliner of the year so far.

Last week, Alphaliner said that, while only 17 large scale international container carriers remain as of January 2017, compared to 20 a year ago, in a market still plagued by overcapacity and low rates, Hong Kong‘s Orient Overseas Container Line (OOCL) may be on the verge of becoming the latest box shipping major to be swallowed up by consolidation.

This week, as Reuters reports, Taiwan‘s Yang Ming Marine Transport (Yang Ming) batted away suggestions that it would consider a merger with another line, adding that it believes that the market’s oversupply is likely to ease in 2017.

“A merger has never been an option for Yang Ming, and it won’t be,” said Yang Ming’s chairman Bronson Hsieh.

“Over the past 10 years, the five shippers with the highest profit margins have been smaller players.  Smaller companies do not necessarily have to be merged.”

As per early report, David Arsenault, Hyundai Merchant Marine‘s (HMM’s) former CEO for the Americas, suggests that if global container shipping’s new mega alliances that are set to launch in April do not ensure freight rate increases, the industry could see more bankruptcies and mergers.

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Source: Ship & Bunker

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