The latest reports from shipping industry experts indicate that a shortage of small ships is looming – but there will be no effect on the SA trades (which all use this class of container ships), according to a local shipping executive. According to the Frenchbased shipping consultants, AXS Alphaliner, these latest forecasts are predicted because of the striking imbalances in the orderbook. While the orderbook for ships over 4 000-TEU capacity represents 62.8% of the existing fleet, the figure stands at only 11.3% for cellular ships under 4 000 – and these are the ships that largely fill the services to and from SA. What would seem an incipient shortage of this vessel type, sees the imbalance becoming even more pronounced when the age profile of the small ships is taken into account. Alphaliner’s analysis shows that the fleet of ships under 3 000-TEU will stagnate during the coming three years as deliveries will only compensate for the demolition of elderly ships, without allowing any demand-driven fleet expansion. This would suggest that the SA market faces a distinct shortage of tonnage in the capacity supply-demand equation. But the chances of any impact on local seafreight rates – implied when supply gets short – are exceedingly slim, according to Andrew Thomas, CEO of Ocean Africa Container Lines (OACL) and chairman of the SA Association of Ship Operators and Agents (Saasoa). This statistical assumption and the actual market reality are poles apart, he suggested. “Yes,” he said, “if there is greater demand than supply then prices will go up. “But that’s not my experience of the market today. “There’s a 20% excess capacity in the container shipping market (with lots of tonnage anchored idle around the world during this recession) – although I must admit that most of these are the biggies in the fleet.” Thomas also noted that ships were currently being tendered at sub-economic prices – with ships in the 1 100-TEU class, for example, that would have cost you US$32-million now going for about US$12-m. “That means that shipowners who have recently paid those very high prices for new tonnage are now desperate to let them out for any rate they can get,” he added. Taking Alphaliner’s raw fleet figures for small ships into consideration, it may appear that now is the time to buy new ships on the cheap, but that, they added, is a conclusion that is shocking in the current oversupplied market. But, according to Thomas, if and when owners decide that buying is right, the small size of ships can be built very quickly. “And there’s also capacity in the shipyards,” he said, “so there’s currently no need for four-year advance ordering.” The market conditions also don’t indicate that rates could go up, he added. “Tradewinds has just reported that the container shipping business will lose between US$20-billion and US$25-bn this year.” Not the time to look at adding new capacity, and certainly not time to try to push up rates.
