Subscribe to our free, weekly email newsletter!


Capacity glut continues to haunt ocean cargo arena

This is in line with a “steam off” during the second half of the year, said shipping analysts
By Patrick Burnson, Executive Editor
October 13, 2011

The Baltic and International Maritime Council (BIMCO) in Copenhagen forecasts inflow of new container tonnage in 2011 to be at 1.3 million twenty-foot equivalent units (TEU). This is in line with a “steam off” during the second half of the year, said chief shipping analyst, Peter Sand.

“As the young fleet holds a very limited demolition potential, it is forecast to grow by 8.7 percent in 2011 – equal to, and outweighing demand growth by close to 2 percent-points,” he told LM.

Sand explained that the amount of idle tonnage has finally picked up, but as demand for new vessels remains weak, tonnage will still have to be retired to restore balance in the industry.

“Should the further leaking of revenue be stopped in the current environment where slow-steaming is already the name of the game, extensive idling or lay-up of tonnage, perhaps even beyond 1 million TEU, may still not be unrealistic,” said Sand.

Bimco analysts added that closing down redundant services is a start, but not the full solution to the task at hand. Global container fleets have grown by 2 million TEU since the turn of the year 2009/2010, resulting in the “active fleet” growing by 3½ million TEU in 20 months (real growth rate of 30 percent).

“Liner carriers are seen to redeliver chartered-in tonnage at the earliest convenience and non-operating owner are likely to carry the lion’s share of the idle fleet,” said Sand.

By extrapolating the trend in inbound loaded container volume on the U.S. West Coast, bearing in mind the disappointing back-to-school season and non-existent peak season, the outlook is “unpleasant,” Bimco added.

Volume growth in the trans-Pacific could become negative. The outlook for the Far East – Europe trading lanes is still not as dire, with an accumulated growth rate of 7.2 percent for the first 8 months and a stable accumulated growth rate of 7-8 percent for the months February to August.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Article Topics

News · Ocean Freight · Global · Ocean Cargo · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA