March saw few deliveries in the containership sector. But orders remain on the books and carrier discipline will remain key to maintaining the balance.
A quiet month for containership fleet expansion comes as a relief as carriers take up tonnage to prepare for new services launching this month
GROWTH in the world containership fleet took a breather in March, with only 14,000 teu of capacity added during the month as deletions took a chunk out of the new vessels added.
By the end of the month, the number of boxships recorded by Lloyd’s List Intelligence had fallen by one to 5,214 vessels, comprising 21.9m teu.
Deliveries were subdued, with only one ultra large containership, the 20,150 teu Ever Gentle, which was delivered on long-term charter to Evergreen by Shoei Kisen Kaisha, the ship financing arm of the Japan’s Imabari yard.
But orders continue apace, with Lloyd’s List Intelligence recording another 1.2m teu of capacity on order for this year alone. While some of those orders will no doubt be pushed back into next year, demolitions will need to pick up significantly if the fleet is not move too far above its current levels.
During March, French carrier CMA CGM signed a deal with state-owned Chinese yard China State Shipbuilding Corp in a ceremony to coincide with Chinese president Xi Jinping’s state visit to France.
The line is adding 10 newbuildings of 15,000 teu to its fleet that it says will be used to replace older tonnage on the Asia-Mediterranean trade.
CMA CGM, which has pioneered the use of LNG as a low-sulphur alternative to heavy fuel oil, will power five of the new ships with LNG, while the remainder will have hybrid scrubbers fitted.
Elsewhere, analysts at Maritime Strategies International expect around 415,000 teu of deliveries in the next six months.
“On paper, Cosco is due to receive 160,000 teu of new tonnage in the second quarter,” MSI said. “Of these nine vessels, however, six have seen their scheduled delivery dates delayed, including three vessels delayed by nine months so far. Further slippage is likely.”
MSI is also expecting around 160,000 teu of scrapping, although the recent time charter market stabilisation could reduce this.
“On the newbuilding contracting front, the next likely major order appears set to be from Cosco, which is apparently in consultation with Chinese yards over a series of 21,000 teu newbuildings,” MSI said.
In an article written for Lloyd’s List, MSI analyst Daniel Richards recommends that carriers focus on improving services rather than returning to the yards in an effort to improve profitability, but warns that a “new round of ruinous over-ordering will arrive in the future”.
Meanwhile, at the smaller end of the market, brokers reported that activity has picked up for feeder newbuildings, with Nissen Kaiun placing orders for four 800 teu vessels at Shikoku shipyard for delivery in early 2020.
In South Korea, Namsung Shipping and Pan Continental Shipping are reported to have ordered one scrubber-fitted 1,000 teu ship each at Daesun Shipyard.
Orders have been placed at Hyundai Mipo for three 2,500 teu vessels on behalf of KMTC.
“We still see interest in feeder container vessels at various Asian shipyards and expect to see further projects materialise in the coming weeks,” the broker said.
Lloyd’s List Intelligence reported 490,000 teu unemployed at the end of March, which represents 2.2% of the total fleet.
As carriers prepare to launch new services for the summer season, idle numbers are falling, according to Alphaliner.
Strong trading in the intra-Asia market had reduced the idle fleet in the 500 teu-3,000 teu range from 149 units at the start of the year to just 103 by March, Alphaliner said.
The classic panamax segment was also enjoying a respite from their recent woes, with the number of idle units of 3,000-5,100 teu also dropping from 61 to 45 over the last month.
“The larger sizes of over 5,100 teu are also seeing a gradual recovery in demand, and a reduction in the number of blank sailings on long haul routes helped push down the total count of idle ships to 39 units,” Alphaliner noted. “Demand will receive a further boost in the coming weeks, as the three main east-west alliances roll out their new service networks from April 1.”
These would include the addition of one new high-capacity Asia-North Europe string, and the lengthening of the rotations of several Asia-Europe and Mediterranean strings will also create demand for extra ships.
“Several owners have also started their scrubber retrofit projects, with more to come over the coming months, which will result in a temporary requirement for substitute tonnage,” Alphaliner said.