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Despite the winter seasonal downturn, overcapacity in the containership market is expected to get worse in 2011, according to analyst SeaAxis in its quarterly market report.
Philippe Hoehlinger, VP of Risk Management at SeaAxis, said containership deliveries over the past five months had reached “unprecedented levels” and carriers will be “squeezed” by capacity that is growing faster than demand.
He said the extra capacity had arrived as cancellations and postponements of new orders had stopped, slow-steaming had reached a “plateau” and vessel scrapings had decreased.
He warned that carriers faced an orderbook representing 26% of current effective capacity.
However, he added: “The good news is that shipping lines are now laying-up more vessels, which will reduce the imbalance between growth in cargo trade and growth in available capacity.
“This will drive the shipping industry in the right direction – although the efforts made are not sufficient for the time being.”
Operational fleet capacity, excluding the impact of slow-steaming, is expected to increase 17% this year and a further 10% by the end of 2011, says the report.
Hoehlinger said: “All trends remaining constant, the vessel capacity oversupply situation will reach its peak at the end of the first quarter of 2011, and will then gradually recover – slightly quicker than previously expected – but not entirely, until the end of 2011.
“Freight rates are already indicating the change of trend that is due to last for the next two quarters.”
International Freighting Weekly
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