The top 21 ocean container carriers increased the combined capacity of their fleets by 6.3 percent in the past year amid slowing cargo demand, according to industry analyst Alphaliner.
Taiwan’s Evergreen Line drove the increase in global capacity — equivalent to 892,000 20-foot-equivalent units — with a 24 percent or 156,500-TEU expansion of its operated fleet.
Singapore-based PIL posted the biggest percentage increase, with a 25 percent or 75,400-TEU jump in fleet capacity.
Capacity shrank at just two global container carriers — Korea’s Hyundai Merchant Marine, down 23,000 TEUs, and Chile’s CSAV, with a 27,100-TEU decline.
The industrywide increases contrasted with sharply lower demand growth. The world’s top 30 ports reported an increase of 2.7 percent in container traffic during the past 12 months.
Evergreen’s growth was driven by a “massive” ship construction program that will see 45 ships of between 8,500 TEUs and 14,000 TEUs delivered between 2012 and 2015, Alphaliner said. During the past 12 months, Evergreen received 14 of its 8,452-TEU “L” class vessels, with 16 more units scheduled for delivery during the next two years.
An Evergreen spokesman noted, however, that the current supply-demand gap isn't the result of the tonnage added in the last 12 months. "The vessels delivered in previous years are still in operation and continue to affect the market," the spokesman said, noting the Taiwanese carrier had refrained from ordering vessels during the downturn, "while many other carriers continued to expand capacity."
The spokesman said Evergreen's new ships are being used to cascade smaller ships in existing rather than to launch new service routes. "Evergreen did not significantly increase capacity in east-west markets, especially in the Asia-Europe trade in the past 12 months. Instead, most of our new service routes are launched in emerging markets, where the demands are stronger than those of advanced economies."
Maersk Line, which is about to deploy the first of its 18,270-TEU Triple E vessels, the world’s largest, boosted its fleet by just 22,900 TEUs in the past year, but retains its ranking as the world’s biggest carrier.
Second-ranked Mediterranean Shipping Co.’s capacity grew by 119,900 TEUs, and No. 3 CMA CGM expanded its fleet by 156,500 TEUs.
Japan’s “K” Line added just 2,000 TEUs, and Israeli carrier Zim Integrated Shipping Services increased its capacity by 6,800 TEUs.
The inability of carriers to curb supply growth to match lower demand has been the main reason for freight rate erosion this year, according to Alphaliner.
Although carriers pushed through significant rate hikes across several trade lanes on July 1, rate sustainability is still in doubt.
The Shanghai Containerized Freight Index showed a 22 percent jump on June 28, ahead of the July 1 hikes, but carrier rate-cutting is expected to bring down the market rates over the next few weeks as ship lines struggle to fill available capacity.
Contact Bruce Barnard at firstname.lastname@example.org.