The number of idle containerships increased from 238 vessels with a combined capacity of about 900,000 TEU in November last year to 435 ships, aggregating 1.7 million TEU in early November of this year, representing a strong indication of the current overcapacity, according to shipping consultancy Drewry.
Parked in various harbours around the world and awaiting operations, these ships currently account for about 9% of the global containership fleet. At the beginning of last year, the idle fleet was just 2.5%. There are several factors which caused this surge in the second half of the year.
One is the widening overcapacity in global container shipping sector and particularly the surplus capacity in old Panamax ships of 4,000-5,000 TEU following the widening of the new Panama Canal locks in June. The capacity of idle ships of 3,000-5,000 TEU has doubled since last November as 89 ships of this size were idle as of November 7, 2016. This size of ships makes them too small for the main trades and they are increasingly seen as obsolete, Drewry explains.
Another factor behind the surge of idle ships is the bankruptcy of Hanjin at the end of August. Former Hanjin-operated fleet account for 622,958 TEU or 36% of the total idle fleet. Of this ex-Hanjin fleet some 200,000 TEU is for containerships of more than 10,000 TEU from discontinued transpacific and Asia-Europe services.
“The Hanjin bankruptcy may have created an artificial jump in the idle fleet, until some former Hanjin-operated ships are transferred to operators,” Drewry said, adding that “it is normal for vessels to be taken out of service during the slack season, so an increase in idle fleet after the busy summer peak season was expected.”
However, over 1.1 million TEU of the idle fleet equivalent to 65% of the total is ships owned by non-operating owners. Operators, or charterers, tend to off-charter vessels first and keep their owned vessels active. Many ships which were previously chartered at relatively high rates are not chartered again and join the idle fleet.
The idle fleet is far from being just old chartered vessels. Over 60% of the capacity comes from ships which are less than 10 years old. Many of the old vessels have already been scrapped, not idled.
More non-operating owners will need to assess whether future demand for chartered tonnage justifies parking these idle assets at an ongoing cost or whether they should bite the bullet and scrap them, Drewry said.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.