Ocean cargo carriers remain in doldrums

The end of the current container shipping downturn is still not in sight, said analysts at the Paris-based consultancy, Alphaliner.

In its latest report (“The Unbearable Weight of Idling”) analysts noted that even improving market segments have not earned enough to reverse the trend.

Carriers have started to reactivate their idled fleets for the summer peak shipping season, resulting in a sharp fall in the idle containership fleet, down from 913,000 twenty-foot equivalent units (TEUs) in mid-March to 620,000 TEUs at the end of April.

Furthermore, said analysts, new service launches in the next three months are expected to bring the idle fleet below 350,000 TEU by July.

“The reduction of the idle fleet provides some relief for the charter market, which has suffered from depressed rates for most of the last three years,” said Stephen Fletcher, Alphaliner’s commercial director.”However,
the containership fleet will not return to full employment anytime soon, since the structural over-supply situation is expected to push idle figures up again by the end of the year.”

The present downturn is unprecedented in both duration and intensity. According to historical containership idling data compiled by Alphaliner, the containership fleet has enjoyed close to full employment prior to 2009.

The impact of previous downturns has been much milder than the current dip. Their effect was usually felt for less than twelve months, with modest unemployment
levels. The last downturn in 2002 lasted for about ten months while vessel unemployment peaked at only 3.2 percent of the fleet.