Oh no, not again. The world’s container shipping lines appear to be fast steaming towards another round of tonnage trouble.
Some of the world’s carriers may find that by the end of the year, with profitability tantalisingly close, a massive influx of new capacity will have rudely jerked them back, wiped the black smudges off their fingers and hosed them down with red ink.
At least it will be familiar territory. The carrier execs have spent much of the last two brutal years trying to scrub the red off their hands while quietly sobbing into their single malts.
But flippancy aside, just look at these figures from Alphaliner, the Paris-based shipping consultancy: This month, deliveries of new container ships will top 200,000 TEUs, setting a new monthly record.
Alphaliner warned that 1.2 million TEUs had been pulled out of lay up by July and with the deliveries of newbuildings, capacity would have grown by 16 percent by the end of the month.
Capacity totalling 1.45 million TEUs will be delivered this year, almost 10 percent of the container fleet. The world’s biggest lines, Maersk, MSC and CMA CGM, will take much of it.
It is not as if the deliveries are a surprise. The vessels were ordered two or three years ago when everyone was having a go. Almost half of the July deliveries will be ships of 10,000 TEUs, ordered when the lines were chasing market share and looking for economies of scale.
The size of the vessels means they can only be deployed on the Asia-Europe trade.
Business has been booming in the first half, with China’s coastal ports handling a total of 62 million boxes, a growth of 22 percent over the same period last year. Shanghai was the busiest with a throughput of almost 14 million TEU, followed by Shenzhen at 10.4 million.
But demand is beginning to weaken and orders are slowing. Reports from analysts and the industry itself expect export-driven throughput at China’s busy ports to start cooling off.
And that is the opposite of good news with all the capacity beginning to pour into service.