Container ship order book beginning to fill up

After two and a quarter years in the doldrums, the order book for containerships again had a following wind in October. Since the order book peaked at 6.89-million TEUs equivalent in August 2008, it has been in continuous decline due to a combination of poor market sentiment and a lack of access to funding. This situation only started to change in June, as the recovery in the freight markets prompted carriers and some non-operating owners to return to the yards. After that 27 consecutive months of decline, orders in October rose for the first time – pushing up the total on order to 3.79-million TEUs capacity, or the equivalent of 26.6% of the fleet, on November 1. And orders actually outpaced deliveries. The figure for October newbuild deliveries was 20 ships totalling 92 000-TEUs – the lowest monthly figure since February. Even lower delivery figures are expected throughout the fourth quarter, coinciding with the slower northern hemisphere winter period. Meanwhile, new contracts reported in October reached a total of 131 000-TEUs – and further containership orders are expected to be placed before the end of the year. There is significant latent demand for new ships, according to French shipping analysts, Alphaliner, as owners rush to place new vessel orders after having shied away from the yards for almost two years. “Although the orderbook will not return to the heady levels of 2007 when it reached a peak of 64% of the fleet,” its monthly monitor said, “its size is expected to remain in the 25%-30% range next year, if present interest levels are maintained.”