Drewry: Ocean carriers running out of places to put mega-vessels

Ordering of containerships eased in the fourth quarter of 2015 despite attractive shipyard prices because carriers are running out of profitable trades on which to deploy them, according to London-based shipping consultant Drewry.    London-based shipping consultant Drewry says container carriers who have built large numbers of ultra-large vessels in recent years “are running out of profitable trades to deploy the big ships.”
   “If we’re right that the economic imperative and the financial ability to order these ships is decreasing we think there is a reasonable chance that the much needed breather from new orders will hold firm,” the firm said in an article in the latest edition of its Container Insight Weekly.
   Drewry noted that “ships of 10,000 TEU or above now constitute approximately one-quarter of the cellular fleet on the water, having only taken up less than 5 percent at the end of 2011. That share will only continue to rise as ships of that size currently make up around three-quarters of the total orderbook.”
   According to Drewry, a record 209 ships with capacity of 1.7 million TEUs joined the world container fleet in 2015. It said 55 percent of the TEU capacity was in ships with capacity of more than 10,000 TEUs. Large numbers of ships with capacities between 8,000 TEUs and 10,000 TEUs were also delivered.
   New orders for ships doubled in 2015 to 2 million TEUs, 90 percent of which is on ships with capacity of 10,000 TEUs or more. But Drewry said, “Most of the new orders occurred in the first nine months of last year as things cooled off in the fourth quarter.
   “Newbuild prices are still very attractive and shipyards are very keen to generate business so the recent slowdown is either a signal that owners have realized there is no demand right now for any more new ships and/or that financial pressure among carriers and non-operating owners is suppressing activity,” the firm added.
   Most ultra-large containerships serve the trade between Asia and North Europe, but Drewry noted CMA CGM has already announced plans to deploy 18,000-TEU ships like the CMA CGM Benjamin Franklin in the transpacific lane between Asia and the U.S. West Coast.