Idle container vessels to increase

Although no a single carrier has confirmed its winter schedules yet, the withdrawal of some capacity is already being planned. Such moves will be required to bring supply and demand into balance, as demand trends show signs of weakening after the past 9 months’ surge.

The idle fleet now stands at 225,000 TEU, compared to 1.5 million TEU in January this year. The 1.27 million TEU reduction has been driven by the rapid redeployment of laid up vessels for service re-activations and for new services. The increased adoption of extra-slow-steaming has also absorbed around 0.32 million TEU since January, bringing the total capacity absorbed through extra-slow-steaming to 0.5 million TEU.

The re-activation of most of the idle fleet occurred despite the delivery of 1.21 million TEU of new vessels so far this year. However, the decline of the idle containership fleet looks certain to be reversed in the next few weeks as seasonal volume reductions are due, especially on the Asia-Europe trade where some 10% of the ships currently deployed on the trade could be removed.

Over the winter period, at least three services are expected to be removed on the Far East-North Europe route, as all as a further two on the Far East-Mediterranean route. This would add about 300,000 TEU to the idle fleet, with some 50 vessels of 3,000 to 8,000 TEU freed up in the process.

The final level of idling will depend on the severity of the demand downturn over the next 3 months and on the carriers’ willingness to accept lower utilisation levels. Alphaliner estimates that between 600,000 and 1 million TEU of containership capacity could be idled by the end of December. Most of the additional idled tonnage will consist of ships larger than

3,000 TEU, with the duration of the idle period expected to stand between two and four months. This forecast assumes that demand will rebound in spring and will remain relatively firm in 2011.