[200415.EN.SEA] Drewry Expects No Relief From Oversupply of Containership Tonnage in 2015

EXCESS growth in tonnage supply in 2015 is in store for container shipping as the more deliveries are expected with no let up in sight, says Drewry Maritime Research.

The delivery of over 60 mega ships in 2015 in the 15,000-TEU range is expected to cause problems for trade route managers - made worse by a slow growth in the global economy, said the London research house.

Some 40 ultra-large container vessels (ULCVs) have been ordered since January with orders coming from CMA CGM as well as OOCL's record-breaking order of six 21,000-TEU ships, reports the UK's Port Technology.

This does not include any provision for Maersk and Cosco orders yet to be finalised. Drewry believes that new orders for ULCVs of at least 18,000 TEU are pushing back the date when supply and demand are expected to meet.

"The industry paid a heavy price for the huge ordering it undertook in 2006/07 and it seems that four years after Maersk spent US$3.8 billion on its Triple Es, history is repeating with many joining or are about to join this now not so exclusive club," said Drewry box analyst Neil Dekker.

"The one difference this time around is that the operational agreements should mean that not all top 20 lines will make this big step," he said.

"The decision by Maersk and MSC to downgrade the average size of ships on one of their European strings to the east coast of South America from 9,000 TEU to 5,500 TEU may not seem particularly important in the grand scheme of things.

"But all ocean carriers have argued that deploying new and big ships across every trade route is strategically critical. This is the first sign that on routes where trade growth is weak, the lower slot cost per unit argument is simply not enough because freight rates dive to well below sub-economic levels," Mr Dekker said.

Source : HKSG.