Container lines have started reactivating their idle container fleets for the summer peak shipping season, which has resulted in a decline of almost a third in idle container ship capacity, according to Alphaliner.
The decline in the idle fleet in the last month has added vessel capacity equivalent of 293,000 20-foot equivalent units to global trade lanes, which could slow or erode the increases in freight rates to and from China. Rates on lanes connecting to China have increased by an average of 38 percent on the China Containerized Freight Index since January, Alphaliner said.
The capacity of the idle container fleet, which stood at 913,000 TEUs in mid-March, fell 32 percent to 620,000 TEUs at the end of April. New services scheduled for launch in the next three months are expected to bring the idle fleet below 350,000 TEUs by July.
The reduction of the idle fleet provides some relief for the charter market, which has suffered from depressed rates for most of the last three years. However, the container ship fleet will not return to full employment anytime soon, since the delivery of new vessel capacity is expected to push idle figures up again by the end of the year.
Alphaliner said the current downturn is unprecedented in both duration and intensity. According to historical container ship idling data compiled by the French analyst, the container ship fleet enjoyed close to full employment prior to 2009.
The impact of previous container shipping downturns has been much milder than the current dip. Their effect was usually felt for less than 12 months, with modest unemployment levels. The downturn in 2002 lasted for about 10 months, and vessel unemployment peaked at only 3.2 percent of the fleet.
The Journal of Commerce Online
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