Supply Chain Managers May Become More Reliant on Mega Vessels

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The 1,000-2,000 twenty-foot equivalent units (TEUs) containership segment has suffered severely during the current demand downturn with a substantial idling of ships and a recent wave of scrappings, reported Alphaliner this week.

According to the Paris-based consultancy, 59 units of 1,000-2,000 teu have left the fleet (as at mid-November) this year. Of this number, 54 units were sold for scrap and five units were de-celled and converted into bulk carriers.

In the same period, 40 newbuidlings of 1,000-2,000 TEU joined the fleet, leaving a net loss of 14 ships in this size segment. Consequently, the 1,000-2,000 TEU cellular fleet has dropped by 1.8% since early January, to 1.8 million TEU. Conversely, only 11 ships have been ordered in this size range since the beginning of this year. The orderbook to existing fleet ratio stands at only 6.3%., which is well below replacement rate.

Although unusually low, this ratio also reflects dim prospects for 1,000-2,000 teu ships, which have been displaced by 2,000-2,700 TEU ships in many instances and are today increasingly confined on short sea trades, niche trades and a few feeder trades with physical constraints.

However, the recent fleet disposals have an obvious positive effect, said Stephen Fletcher, Alphaliner’s commercial director.

“Whereas the total idle ship fleet has been increasing since this summer, the number of 1,000-2,000 TEU ships without employment has decreased over the past two months. Some areas, such as the Caribbeans and North Europe, even became short of such ships for prompt or spot charter, leading some owners to reposition ships from more crowded areas.”


About the Author

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 [email protected]

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