Despite more than two million TEU of newbuild container vessels joining the global fleet so far this year, the pool of open tonnage remains at a record low. This presents a significant challenge to carrier ship managers looking to compensate for schedule delays and essential dry-docking by tapping into the charter market.
According to a survey by Alphaliner, there were only 67 vessels, with a capacity of 195,159 teu, recorded as commercially idle on 12 August, representing just 0.6% of the world’s 30m teu global fleet capacity. Moreover, the idled units are heavily weighted towards the small sizes, with 41 of the 67 having capacity of less than 2,000 teu.
“The liner shipping peak season, intermittent congestion at some key ports and the ongoing diversions around Africa continue to put a strain on the supply of tonnage,” said Alphaliner.
It added that industrial action on the US east coast, the looming rail strike in Canada, as well as disruptions in the Gulf of Mexico and in India, could put even more strain on vessel supply as carriers look to secure additional ships to mitigate network delays.
Maersk said last week that, since the outbreak of the Red Sea crisis, it had chartered some 172,000 teu of extra capacity “to mitigate the impact of the disruptions on our customers’ cargo flow”. The Danish carrier and its peers have drained the charter market of tonnage to shore up their networks, and the idle fleet has been further depleted by the launch of ‘opportunist’ services taking advantage of inflated spot rates – a fashion seen during the post-pandemic demand boom.
Around 500,000 teu of newbuild container vessels hit the water in June and July, with over 100,000 teu delivered this month so far. Deliveries this month include the 16,592 teu methanol-dual fuel powered Alexandra Maersk, the fifth in a series of 12 vessels ordered by the carrier in August 2021.
Notwithstanding the extra capacity required to service disrupted liner networks, the forthcoming break-up of the 2M Alliance, of Maersk and MSC, and the departure of Hapag-Lloyd from THE Alliance is weighing on the minds of carriers that do not want to lose market share as a consequence. This will become critical during the upcoming slack season, when carriers are obliged to discount prices to fill allocations. According to Alphaliner data, there is still around 1m teu of capacity scheduled to be delivered this year, with a further 2m teu due in 2025.
Meanwhile, carriers are in bullish mood after recording better-than-expected profits at the half-year stage, with for example Israeli carrier Zim saying it expected “even better results in the second half of 2024”. As a result the cash-rich carriers are once again turning to Asian shipyards for newbuild slots, with confirmed orders this year already at more than 2m teu. However, these orders, which are mainly concentrated at Chinese yards, will not be received by carriers until 2027 at the earliest.