Containerships demand to catch up with the industry supply in the next few years
Boxship supply will grow more slowly than expected, allowing demand to catch up with capacity by 2015 and support higher rates. So, the industry begins rebound from worst downturn ever, Journal of Commerce reports citing Paul Dowell, Director of Research and Consultancy at Howe Robinson Shipbrokers Research.
Cancellation and delay of vessel orders, scrapping of older ships and slow-steaming will reduce growth in capacity to manageable levels, Paul Dowell, director of research and consultancy at Howe Robinson Shipbrokers Research, told the annual Marine Money International conference in New York.
It was the latest in a string of optimistic forecasts about an industry that's beginning to rebound from its worst downturn ever. Container ship lines lost an estimated $15 billion globally last year when the recession undercut trade volume just as shipowners were taking deliveries of scores of large, new ships ordered several years ago amid expectations of continued rapid growth in demand.
New ships are still coming out of shipyards but at a manageable rate, Dowell said. He said that at the start of this year, deliveries during 2010 are expected to total 1.5 million 20-foot equivalent units of capacity, for an 11 percent increase in capacity. He said about 530,000 TEUs of that will be delayed till 2011 or 2012 and that slow-steaming will soak up an additional 175,000 TEUs. Scrapping and a small number of order cancellations will reduce fleet expansion this year to about 750,000 TEUs or 5.6 percent growth, he said.
The last of the pre-recession orders for new ships are expected to be delivered by shipyards during the next couple of years, and shipowners are expected to be cautious about new orders. "We're looking for growth to average 5 or 6 percent for the next five years or so," Dowell said. "That is not a great burden on the industry."
Worldwide cargo demand, meanwhile, is expected to rise 9.3 percent this year and 7.6 percent in 2011, Dowell said. He forecast that containerized cargo volume will increase 9.3 percent in the trans-Pacific and 13.8 percent on Asia-Europe trades from last year's depressed levels.
Cancellation and delay of vessel orders, scrapping of older ships and slow-steaming will reduce growth in capacity to manageable levels, Paul Dowell, director of research and consultancy at Howe Robinson Shipbrokers Research, told the annual Marine Money International conference in New York.
It was the latest in a string of optimistic forecasts about an industry that's beginning to rebound from its worst downturn ever. Container ship lines lost an estimated $15 billion globally last year when the recession undercut trade volume just as shipowners were taking deliveries of scores of large, new ships ordered several years ago amid expectations of continued rapid growth in demand.
New ships are still coming out of shipyards but at a manageable rate, Dowell said. He said that at the start of this year, deliveries during 2010 are expected to total 1.5 million 20-foot equivalent units of capacity, for an 11 percent increase in capacity. He said about 530,000 TEUs of that will be delayed till 2011 or 2012 and that slow-steaming will soak up an additional 175,000 TEUs. Scrapping and a small number of order cancellations will reduce fleet expansion this year to about 750,000 TEUs or 5.6 percent growth, he said.
The last of the pre-recession orders for new ships are expected to be delivered by shipyards during the next couple of years, and shipowners are expected to be cautious about new orders. "We're looking for growth to average 5 or 6 percent for the next five years or so," Dowell said. "That is not a great burden on the industry."
Worldwide cargo demand, meanwhile, is expected to rise 9.3 percent this year and 7.6 percent in 2011, Dowell said. He forecast that containerized cargo volume will increase 9.3 percent in the trans-Pacific and 13.8 percent on Asia-Europe trades from last year's depressed levels.