Container ship lines may be "shooting themselves in the foot" by restoring vessel capacity faster than cargo volumes rise, a new report by Axis Intermodal UK warns.
"Overall, 2011 is still expected to be a stronger year than 2009 but the increase in capacity will delay the arrival of a balanced situation, which is now expected to occur, on a sustained basis, at the end of 2011," Philippe Hoehlinger wrote in the latest SeaAxis report.
He said effective capacity -- vessels in operation -- is expected to rise 12 percent in each of the next two years as carriers reactive laid-up ships and take deliveries of new vessels. Cargo demand, meanwhile, is expected to grow at only 9 percent a year through 2011.
Although carriers' supply-demand balance is expected to improve this year "there will still be a differential of 3 percent between the increase in the 'effective' fleet and the increase in cargo//volumes by the end of 2010."
"By accelerating the redeployment of the idle fleet and not maintaining pressure on shipyards to delay deliveries, the shipping industry is shooting itself in the foot and (inviting) a more pronounced seasonal downturn at the end of 2010," Hoehlinger wrote.
The SeaAxis report said carrier finances are improving as rates and volumes rise after a year in which is was "a miracle" that no major line went bankrupt. But it warned that bunker and other costs have risen from last year and carriers' balance sheets were badly weakened by last year's losses of about $15 billion for major carriers.