Several of the new container ships that were scheduled for release in 2014 (with a total capacity of nearly 100, 000 TEU) have slipped into this year. While this inconvenience seems to have helped in narrowing the gap between supply and demand last year, it will only contribute to the supply pressure that is being applied this year, as stated by the Drewry Maritime Research.
According to Drewry, further delays to newbuild deliveries have to be installed in order to prevent the widening of the gap between supply and demand in 2015. The industry’s growing appetite for new ULCVs is turning into a burdensome task for carriers to match supply with demand, and is quite possible to extend how long carriers will have to wait for harmony.
The supply and demand levels demonstrated a steady parallel growth pattern during the first-half of the last decade, but have taken on two separate directions after an ordering frenzy occurred in 2007-08, followed by the global financial crisis that caused the demand to derail.
The latest Container Forecast report from Drewry indicated that 2014 was yet another year that was filled up with excessive supply growth. By the end of 2014, the total global cellular fleet had a nominal capacity of 18.1 million TEU, which was a 6.0% increase from 2013, all the while world container traffic was falling behind, sitting at 5.2%.
CSCL Globe - The largest containership launched in 2014. Image: Kevin Salmon
The gap would have been even wider, if it had not been for an estimated 100, 000 TEU worth of newbuild capacity not arriving on time as planned. Without this “slight slippage” the global fleet would have grown with an extra 0.6 points, totaling to 6. 6% in 2014.
Such slippage is not very uncommon as shipowners and yards tend to re-negotiate some of the delivery terms, and the total sum for 2014 was a bit lower when compared to some of the more recent years. Despite this, we have to point out that the tonnage still must be delivered at some point down the line and such delays merely postpone the problem, not solve it. Drewry believes that this year the problem is especially acute due to the fact that the overhand in 2014 deliveries will be adding to the 1. 85 million TEU that is already scheduled to be added to the fleet.
The scrapping process regarding old ships coupled with the further slippage of newbuilds into 2016 will lower the net addition to the fleet at a level around 1. 35 TEU, but it would not be enough to prevent the largest spike in annual capacity since back in 2007. In conclusion, Drewry expects the global fleet growth to exceed demand with a 7. 2% mark versus a 5. 2% one.