Laid Up Box Fleet Shrinks to Three Year Low

Laid Up Box Fleet Shrinks to Three Year Low

The laid-up container ship fleet fell to its lowest level since August 2008 and is still shrinking as ocean carriers activate idle tonnage, Alphaliner reported.

There were only 63 ships with a combined capacity of 80,000 20-foot equivalent units without work at the beginning of June, and an additional 20,000 TEUs likely will resume trading in the coming weeks, according to the container market analyst.

By the Numbers: U.S. Container Trade with Italy.

The number of ships of more than 1,000 TEUs in long-term lay-up shrunk to less than 15 units, including a handful of mothballed U.S.-flagged vessels, and is now approaching regular pre-crisis levels.

But while the idle fleet has fallen sharply in the past six months due to high vessel demand, the outlook remains uncertain, Alphaliner said.

Low utilization rates and severe freight rate erosion on key trade routes could force carriers to scale back capacity later in the year.

Utilization on the Asia-Europe and Far East-U.S. routes remained below 90 percent in the past four months which has resulted in a “severe” reduction in spot market freight rates.

While some carriers have trimmed capacity in the past two months, the vast majority of lines continued to bring additional capacity onto the market.

Of the 32 carriers surveyed by Alphaliner over the past year, 27 added capacity while only five reduced their cargo space, including TCC which abruptly ceased its Transpacific liner operations in April and Argentinian carrier Maruba which was forced to scale back services after owners withdrew their charter vessels.

Chilean carrier CSAV’s sudden suspension this week of a Far East-U.S. West Coast service could signal the start of a reversal of the recent high demand for tonnage, according to Alphaliner.

If demand fails to pick up in the next two months, the return of surplus vessels by charterers could lead to an increase in the idle fleet by September.

-- Contact Bruce Barnard at brucebarndard47@hotmail.com.