Seventeen of the Top 20 container carriers worldwide are expecting deliveries of new ships in the next 12 months, which could make 2014 a record-breaking year for capacity, according to industry analyst Alphaliner.
More than 1.6 million 20-foot-equivalent units of new capacity are slated for arrival in the upcoming year, including 1.28 million TEUs or 76 percent for the Top 20 carriers. A further 315,700 TEUs owned by non-operating owners are currently open or without known charter assignment, most of which are expected to join the Top 20 carriers, and 85,000 TEUs are scheduled for delivery to container lines outside of the Top 20 carriers.
New capacity growth in the upcoming year will be led by Evergreen, Maersk Line, China Shipping Container Lines and Hamburg Süd, which will each receive between 110,000 and 200,000 TEUs.
NYK Line, “K” Line and Zim are the only major carriers not expecting new vessels in 2014.
The high level of new ship deliveries is also expected to continue through 2015 and 2016, with several carriers, including Hyundai Merchant Marine, Hanjin Shipping, Cosco Container Lines and Evergreen securing new long-term charters for additional ships in the last few weeks.
Hanjin Shipping confirmed in early December a charter for four 9,040-TEU ships from Ciner Ship Management, slated for delivery in late 2015 and early 2016, and HMM confirmed that it will charter six 10,000-TEU vessels from Zodiac Maritime, for delivery from early 2016. Cosco is also ordering five 9,400-TEU ships, in its first deal for new vessels since 2008.
Furthermore, Evergreen recently confirmed that it will charter seven new vessels of 14,000-TEU capacity from undisclosed owners. The seven new ships are expected to be delivered in 2015 and 2016, while 10 14,000-TEU ships ordered in 2012 are scheduled for delivery by September 2014.
As a result, Evergreen is on track to continue expanding its capacity program in 2014, with a total of 18 new ships of 8,000 to 14,000 TEUs due for delivery, for an overall capacity gain of 195,000 TEUs, Alphaliner said. It is ending 2013 with a net gain of 123,000 TEUs in capacity, or 17 percent.
Mediterranean Shipping Co. recorded the largest capacity gain among all carriers in 2013, with a net gain of 146,700 TEUs or 7 percent, the analyst said. New deliveries accounted for 116,600 TEUs, but the carrier also scrapped nine owned units for 20,500 TEUs, while taking on 50,600 TEUs in new charters. The increase further narrows the gap to Maersk to 201,000 TEUs. Although Maersk retained its top spot in 2013, it made no net gain in operated capacity as its 175,900 TEUs of new ships delivered was fully offset by the redelivery of an equal amount of chartered tonnage.
The highest percentage gain of capacity in 2013 was recorded by Pacific International Lines, with a 26 percent fleet increase, which enabled PIL to become the 15th largest carrier, overtaking “K” Line, HMM and Zim.
The anticipated record deliveries of new vessels through 2016 will continue to keep supply and demand out of sync, aggravating the container shipping industry’s overcapacity problem. The fleet of idled surplus container ships hit 718,000 TEUs in mid-December, and lay-ups are expected to persist in the next two years.
However, the new class of 18,000-TEU vessels, which have so far been ordered by Maersk Line, China Shipping and UASC, are expected to reduce operating costs by 30 percent compared with 13,000-TEU vessels, according to Seabury. As carriers are not expected to achieve freight rate increases in the near term, container lines are increasingly looking to super-post-Panamax ships in an attempt to cut costs. Slow-steaming, which absorbed 7.4 percent of fleet capacity in 2013, could also help address overcapacity issues.