Shipping lines juggle supply/demand ratio

When it comes to matching supply to demand in order to maintain the level of freight rates, it’s a fine balancing act. According to Iain McIntosh, regional sales manager for MOL, a number of market reports are what he describes as “upbeat” – and moves being made by shipping lines are leading to a better capacity supply/ demand situation. He also stressed that scrapping of vessels was matching the input of newbuild tonnage and this was also helping supply/demand. Quoting one report, McIntosh said: “Freight rates are holding on to a healthy level on the main routes, while new large vessels are being put to work smoothly without adding extra downside pressure to the current balance. “In light of the slowly developing demand side, it’s very positive that the industry deals with the supply side issues to improve the fundamentals.” Another new market summary that FTW found on the web confirmed that scrapping activity was staying strong. The containership fleet has just surpassed the 16-m TEU mark, with 3.6m TEU left on the orderbook for future delivery. “But,” it said, “the growth is luckily diminished due to excessive demolition activity – where 90 vessels of an average size equal to 1 866 TEU (an approximate total of 167 940 TEU) has neutralised the inflow of 167 947 TEU. “In combination with a delivery pace that is expected to slow down in the coming five months, the forecast fleet growth is lowered to 7.2% in 2012.” The general consensus is that things showed a slight improvement in the second quarter, and this can be expected to continue getting better as the year progresses, and into next year. CAPTION Moves being made by shipping lines are leading to a better capacity supply/demand situation.