New containership orders point to industry recovery
Confidence has returned to the container shipping markets with owners starting to place orders for new ships in significant numbers, overcoming concerns of over-capacity that have dominated the industry in the past 18 months.
While order cancellations and deferrals as well as the idling and scrapping of excess tonnage were still key concerns for the industry as recently as the first quarter of this year, these issues have now given way to renewed optimism according to Alphaliner. Several shipping lines have posted record profits in the second quarter. The latest quarterly financial results of Hapag-Lloyd and Maersk were the highest in both companies’ history, surpassing even the pre-crisis levels of 2006-2007.
This has encouraged some owners who are banking on an improved operating environment and attractive newbuilding prices, as well as rising second hand vessel values, to return to shipyards for new orders. While only APL and Evergreen have placed significant fresh orders in recent months, a handful of other Asian and European owners are expected to jump on the bandwagon before the end of the year. In stark contrast to last year’s trend to postpone the delivery of newbuildings, in some cases until 2014, some owners are currently seeking earlier delivery dates for 2012.
There also remain a dozen 12,500-13,000 TEU newbuildings without known charters, including some due for completion in late 2010 and for 2011, which would be of interest to carriers which seek additional tonnage at short notice, assuming these ships are not yet committed.
Despite the fresh optimism, there is still serious concern over the sustainability of the recovery in demand, with some carriers remaining cautious of the over-capacity threat. However, many non operating owners still face cash-flow difficulties as access to credit remains difficult, while charter rates have not yet fully recovered. This could mitigate some of the reckless over-ordering which has characterized past recoveries in the sector.
These moves come as the global containership fleet reached another milestone last week, with total cellular vessel capacity passing the 14 million TEU mark. The cellular vessel fleet has climbed to 4,841 ships for 14,002,976 TEU, according to Alphaliner’s latest records. The year-to-date growth thus registered at a 7.2%, as the fleet increased from 4,719 ships for 13,057,788 TEU at the beginning of January.
The accelerated rate of new vessel deliveries has also contributed significantly to the growth, led by the introduction of large containerships of more than 10,000 TEU, with 15 such units delivered since June.
