This week saw the confirmation by US-listed containership owner, the imaginatively named Box Ships, that it had sold the 10-year old 2006-built Box Queen for scrap. Given the normal assumption of a 25-year lifespan of a vessel the Box Queen has been scrapped very far ahead of its expected end of life and depreciation of its book value. While no figures were given a large loss on book value is to be expected.
Box Ships is by no means the only company scrapping panamax container ships well before the expected end of their life, with a 10-year old 4,546 teu ship being reported sold for scrap back in September by cash buyers Wirana.
One of the world’s largest containership tonnage providers Seaspan Corp reported in its Q3 results that it had sold two 2003-built 4,600 teu panamax vessels for scrap. On the first sold in August, the Seaspan Efficiency, it booked a $16.5m loss on the sale.
The panamax boxship has been hit hard by the expansion of the Panama Canal which now means the new panamax, or neopanamax is it known, is 11,500 teu in capacity leaving the traditional panamax unwanted and unloved. At the same time an overall huge upsizing of containerships over the last decade leaves the panamax generally small and inefficient, with almost all built to pre-eco-ship designs, in an already oversupplied market.
The charter rates for panamax boxships are now such that its cheaper to park them up in anchorage in Southeast Asia than it is to operate them. Just ask beleaguered tonnage provider and shipping trust Rickmers Maritime – it has 16 such vessels – five currently decommissioned. Box Ships has four in its fleet apart from soon to be dismantled Box Queen of these two – both 2007-built and 5,095 teu in capacity – it lists no employment for.
According to analyst Alphaliner 101 vessels in the 3,000 to 5,099 teu class are currently idle, a growing figure that is only being tempered from even further rise by scrapping. Back in September Wirana warned that seven to eight year panamaxes were likely to start hitting the beaches.
It would seem container shipping is quickly marking the end of the traditional panamax boxship with an early grave the final, and only, destination for many in the breaking yards of South Asia.
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