LONDON: The idle container ship fleet closed 2016 slightly lower, but the outlook for the new year is mixed amid rising deliveries of new vessels and increased scrapping of Panamax ships, according to industry analyst Alphaliner.
Unemployed capacity dipped to 1.42 million twenty-foot equivalent units, or 6.7 percent of the global fleet, from 1.44 million TEUs in early December, but the number of jobless ships rose to 344 from 336 as more smaller vessels became jobless.
The unemployed fleet of ships between 500 TEUs and 3,000 TEUs grew in the past two weeks, largely due to lower feeder demand during the end-of-year lull.
Larger vessels, by contrast, were in greater demand, due mainly to the 2M Alliance, Maersk Line and Mediterranean Shipping Co., which added two new Far East-US West Coast strings in December.
The increased scrapping of Panamax tonnage, driven by the opening of the enlarged Panama Canal, also helped reduce the number of jobless vessels above 3,000 TEUs, Alphaliner said.
Maersk Line in December announced plans to scrap eight Panamax ships, while Rickmers Maritime Trust in the same month sold for scrap the seven-year-old Rickmers India, the youngest ever container ship added to the scrap heap.
Unemployment has declined from highs in 2016 when the market was hit by the demise of the classic Panamax sector followed by the collapse of South Korea’s Hanjin Shipping, which resulted in many chartered vessels being redelivered to their owners.
The idle fleet reached an all-time high of 1.59 million TEUs, close to 8 percent of the global fleet, in October.
“The outlook remains mixed in the coming weeks, with a large number of Panamax ships committed for scrapping that will help to bring down overall idle numbers,” Alphaliner said.
“However, the newbuilding overhang remains huge, with some 40 units ready for delivery in January alone. Some of them were already deferred from 2016. Their owners might consider some further deferring.”
Meanwhile, the global container ship fleet grew by just 1.5 percent to 20.27 million TEUs in 2016, the lowest annual growth rate in the industry’s history, Alphaliner said.
Growth was kept in check by the record 192 vessels of 654,900 TEUs scrapped during the year. The total capacity of vessels deleted topped 200 units of 664,300 TEUs after adding a handful of de-celled ships and two casualties.
Deliveries of new container ships totalled 934,500 TEUs in 2016, down 46 percent from the previous year, with owners delaying deliveries of some 60 vessels with a total capacity of 400,000 TEUs in response to poor employment prospects.
A further 18 ships with an aggregate capacity of 57,000 TEUs are believed to have been canceled.
However, “the surplus capacity overhang remains the industry’s biggest headache, especially with some 1.7 million TEUs of new capacity due in 2017,” Alphaliner said.