News / Shortage of ships for charter could force carriers to shelve new services

09/05/2018

An acute shortage in the availability of charter tonnage could force carriers to shelve their plans to launch new liner services this summer.

And a big hike in daily hire rates for container ships that do become available, combined with spiralling fuel prices, will force a ...

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Andy Lane
May 10, 2018 at 2:25 pm
If the CTS March and therefore 2018Q1 demand numbers are correct, then the 8.2% year-on-year deployed capacity growth will have resulted in far lower utilisation levels (for the industry as a whole). So I think that more services being added (unless March 2018 proves to be an outlier) is less likely than the withdrawal of services.

The reduced port-pair frequency due to the deployment of larger ships does not necessarily increase transhipment and feedering demand. However in a truly capacity constrained environment and when fuel prices are high, this can (and will) cause Lines to trim the tails of their networks and replace some direct calls with hub and spoke alternatives. That will naturally not be workable or possible if there is an insufficient fleet of vessels in the short years ahead.

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