Two years of imbalance could lie ahead, but suddenly there are signs that demand may catch up with the forecast supply in 2016. A resurrection of the order book could destroy that dream, but the current trend is notable.
Ship ordering has ground nearly to a halt just as European traffic demand, the key to the employment of the ultra-sized fleet, has turned up. The orderbook has dropped to beneath 20% of fleet capacity, compared to nearly 50% several years back.
According to Platou’s numbers, only three containerships were ordered in June, all below 3,000 teu.
Through the first half, 74 ships were ordered, including 33 vessels above 10,000 teu, accounting for more than two-thirds of the 620,000 teu capacity. The present pace is well below that of recent years. New orders amounted to 247 vessels of 1.97m teu in 2013, and 240 vessels of 1.9 million teu in 2012.
The results appear to have emerged from the rise and fall of the P3 Alliance, which aimed at suppressing competition by compressing all but one major carrier into one of three alliances. P3 would have claimed nearly half the main line shipping capacity.
The expectation of three alliances led to a spate of orders for ultra-sized vessels, 13,000 to 18,000 teu, as carriers used easy credit, cheap money and knocked-down prices to claim a seat at the table. The price of joining an alliance in effect was a commitment to supply ultra-sized tonnage.
The ordering started to wane earlier in the year as the industry awaited a regulatory decision on the formation of the alliances. After a start of 25 ships in January, the ordering dwindled. The US and European authorities then went along with P3, but the Chinese denied it on the basis of anti-competition. After the rejection, near silence.
The present order book through June showed 451 vessels totaling 3.45m teu. As scheduled, 141 vessels of 890,000 teu would be delivered in the second half of 2014; 207 vessels of 1.76m teu in 2015; and 103 vessels of 800,000 teu in 2016.
Old habits die hard, so it is difficult to describe disciplined ordering as the new normal, and P3’s smaller replacement the 2M vessel sharing agreement is now on the cards, and just this week China Cosco said it was mulling ordering five 13,000 teu vessels. But the industry’s fragile financial condition may make it so.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.
|Add Seatrade Maritime News to your Google News feed.