SLOWER VESSEL SUPPLY GROWTH PREDICTED FOR 2003

SLOWER VESSEL SUPPLY GROWTH PREDICTED FOR 2003    After three years of rapid increases in the world’s fleet of container vessels and extensive periods of over-capacity, deliveries of new ships in 2003 and 2004 are now expected to decrease.
   The reversal of trends could lead to a better balance between supply and demand across the industry, according to analysts.
   U.K.-based Clarkson Research Studies expects that the global containership fleet will increase by 6 percent in 2003, to 8.5 million TEUs. This follows growth rates in container vessel capacity of about 9 percent in both 2001 and 2002. Other industry analysts have cited double-digit increases in the containership capacity in 2001 and 2002.
   Clarkson predicts that the global container trade is set to grow “slightly faster than the fleet in 2003.” Trade volume would rise by 8 percent in 2003, as compared to a vessel capacity increase of about 6 percent.
   “Of more interest in the New Year will be the prognosis for 2004, for which the delivery schedule is continuing to build up,” Clarkson said in a report.
   There appears to be a low level of orders for new container vessels due to be delivered in 2004. However, Hapag-Lloyd, Hamburg-Sud, CMA CGM and other shipowners have recently ordered large containerships due to be delivered in that year.
   “Large industry capacity additions in the near-term could cause fundamentals to get worse before getting better,” the investment analysts Morgan Stanley said in a report.
   “However, at some point over the next 12-18 months, we believe the market will begin to focus on the fact that the 2004 industry capacity additions of 6 percent remains very low by historical standards, setting up the industry for an eventual recovery,” Morgan Stanley added.
   In an investment report on CP Ships, the U.K.-based container shipping group, Morgan Stanley said that investing in CP Ships shares “is for patient investors.”