Record Container Ship Capacity Growth Forecast

Record Container Ship Capacity Growth Forecast

Container ship operators are scheduled to take a record amount of new capacity in 2012, with deliveries set to expand capacity some 9.5 percent over available space this year, according to Braemar Seascope's latest Containership Fleet Statistics.

The report said carriers are scheduled to receive 1.55 million 20-foot-equivalent units, increasing available capacity to 16.8 million TEUs.

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That will beat the previous record of growth of 1.52 million TEUs set during 2007 and comes as carriers are seeing soft pricing across several trade lanes amid weakening demand. Braemar is forecasting huge additions to the cellular fleet in the ultra-large sector, which will raise the threat of overcapacity on the Asia-Europe trade lane, where overcapacity has been eroding rates since last winter.

Of the 230 ships due for delivery next year, 59 have a nominal container capacity of 10,000 TEUs or more, which will introduce an additional 0.8 million TEUs into this segment. The growth of containerships fleets in the size bracket of 10,000 TEUs or more is already expected to reach 70 percent year-over-year in 2011, and will grow by an additional 57 percent in 2012.

Because the vast majority of these ultra-large containerships are currently deployed on the Asia-Europe trade lanes, the influx of ultra-large capacity ships next year would be enough to create another five loops, each with 10 13,000-TEU vessels.

For vessels up to and including 5,100-TEU capacity, it is a very different story. The lower level of investment in newbuilding projects is apparent as growth is expected to reach only 2.9 percent this year before hitting 3 percent in 2012.

Since January 2010, owners have ordered 1.7 million TEUs of capacity on boxships with a capacity of 5,100 TEUs or more compared with 0.4 million TEUs of smaller ships below 5,100 TEUs.

Containerships of 10,000 TEU or more comprise 49 percent of the global orderbook by capacity. By contrast, containerships of up to 5,100 TEUs represent only 20 percent of the global orderbook.

Braemar said because shipowners in Germany's KG investment market have largely gotten out of the business of ordering ships, investment in smaller container ships has been lackluster. However, Braemar expects renewed interested in feeder tonnage once the current cycle of investment in post-Panamax ships has waned.

-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.