06 Jun Container ship over capacity & slow steaming
The analyst, Drewry has published its latest Container Insight report. It believes ocean carriers are losing money due to freight rate competition on the east t0 west routes, and that there is still significant surplus capacity.
Drewry’s report states: “At the end of April, there were still 31 ships of over 10,000 teu due for delivery this year, and carriers are running out of places to hide unwanted 8,000 teu vessels cascaded out of the Asia-Europe trade lane.”
There continues to be insufficient cargo growth between Asia and the US and Asia and east coast of South America to absorb the new capacity coming on stream as a result of decisions made in the previous decade. This will mean that either more vessels will have to be laid-up, or further slow-steaming introduced.
The analyst estimates overall vessel speeds remained more-or-less constant between September and March, although Drewry’s research shows that there were wide variances at individual schedule level, with much of this depending on the extent of port activity / capacity. “Longer transit times can be expected but schedule reliability should improve due to the greater opportunity for making up lost time.”
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