Capacity overtakes demand in global containership fleets

The number of containership deliveries since the start of the year passed the 1 million- TEU mark in mid-October. However, shipping lines have not felt any “noticeable increase” in capacity on the South African routes, according to Jonathan Horn, Safmarine’s Africa regional executive. “Most of the supply chain challenges we’ve faced this year (in SA) have been related to port congestion,” Horn told FTW. “These were primarily associated with the problems experienced with the implementation of the Transnet Port Terminals’ new IT system, Navis, at the Durban Container Terminal. “The implementation problems have been felt throughout the industry. Container moves have dropped, vessels have been delayed, and landside productivity in the port has been affected. This said, the situation is gradually improving.” However, the line has three 4 500-TEU Wafmax vessels on order for delivery between February and June 2012 and four 18 000dwt MPV vessels to be delivered between November 2011 and March 2012. The total capacity being added to the carrier’s fleet is 1 200 TEUs in 2011. In 2012 the carrier will add 17 100 TEUs. The carriers behind the current global orderbook are set to benefit from a significant cost advantage. The carriers’ first action after emerging from the worst recession in container shipping history ever, was to order even more capacity and new orders were placed in an already over-supplied market. According to analyst Alphaliner, a total of 154 ships have been distributed this year and a further 280 000 TEUs is scheduled for delivery over the next ten weeks, bringing the expected deliveries to 1.28 million TEUs for the full year. The orderbook is heavily skewed toward large vessels. There is a growing trend to deploy ships of 7 000-10 000 TEUs on north-south routes. The number of “nondeliveries” due to cancellations, deferrals and slippage has fallen to 8.5% – twice the long-term historical levels, as the bulk of the delivery deferrals was negotiated in 2009 and 2010. As it turned out, 2009 and 2010 were exceptional years as the financial crisis led owners and carriers to defer the deliveries of a significant part of the orderbook, as well as to cancel part of their orders. Such crisis-driven initiatives were not to be repeated in 2011. Cancellations have actually been marginal this year, with no impact on the deliveries scheduled for 2011. Actual deferrals and slippage are expected to reach some 120 000 TEUs , or only 8.5% of the expected deliveries this year, based on the Alphaliner database, which is updated in real time to incorporate the latest delivery schedules. The value of the vessel orderbook currently stands at US$57 billion, according to Alphaliner figures. Of this, $30 billion was committed