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
in the NewsState of Logistics 2016: Pursue mutual benefit Case Study: LEAN Yields Big Results project44 and 10-4 systems announce strategic partnership to take effect in late 2016 FTR’s Trucking Conditions Index sees sequential gains Self-driving truck makes its first (beer) run More News
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 AuthorPatrick 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 [email protected]
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!
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction? Badcock Home Furniture &more: Out with paper, in with Cloud TMS View More From this Issue