News / Flood of mega-newbuilds a real challenge for carrier fleet managers

Photo: OOCL

Ocean carriers received another 200,000 teu of newbuild tonnage last month, following a record 300,000 teu delivered in June, exerting pressure on fleet managers to find continuing employment for their existing vessels in the midst of a down cycle.

Moreover, the July arrivals included three 24,000 teu ULCVs, followed by two more 24,000 teu behemoths that have hit the water already this month.

The 24,000 teu vessels will all be deployed on the Asia-North Europe tradelane, displacing smaller vessels that will be cascaded into transpacific and secondary routes.

The latest ULCV to be delivered by Chinese shipyards is the 24,188 teu OOCL Felixstowe, which Alphaliner reports is the fourth in a series of 12 being constructed for Cosco Group subsidiary OOCL.

It will follow three earlier sister ships into the Ocean Alliance NEU3/LL3 service, which deploys a mixed Cosco and OOCL fleet of megamax ships and smaller vessels in the size range from 10,000 teu to 14,000 teu, reported Alphaliner.

Meanwhile, Hapag-Lloyd received the second of 12 LNG-powered 24,000 teu class UCLVs the German carrier ordered in 2020 and 2021.

The 23,664 teu Manila Express followed the Berlin Express into service and, according to Alphaliner data, sailed from Ningbo on 5 August to be phased into THE Alliance Asia-North Europe FE3 loop, replacing the 13,371 teu Rome Express.

“This service is in the process of being upgraded to an all-megamax operation, with ships of HMM, ONE and Hapag-Lloyd,” said the consultant. In fact, THE Alliance partner, Japanese carrier ONE welcomed the arrival of the 24,136 teu ONE Infinity and sister ship ONE Integrity last month.

However, the timing of the injection of capacity into the Asia-North Europe tradelane could not be worse.

A subdued peak season is already obliging carriers to blank sailings during a period when they should be running full ships, and the phasing-in of larger tonnage is only going to intensify the downward pressure on spot and contract rates as carriers endeavour to navigate the coming slack season quarters.

And, notwithstanding the flood of new arrivals this summer, the top-ranked carriers, with the exception of Maersk, all have huge orderbooks of ships still to be delivered.

According to Alphaliner data, the newbuild race is led by MSC’s massive orderbook of 1.5m teu, followed by CMA CGM with 1.2m teu and Cosco Group and Evergreen jockeying for third place with 900,000 teu and 840,000 teu, respectively.

So far, carriers have been able to juggle their assets and avoid laying-up tonnage by blanking and slow-steaming, but with some 2.4 million teu of newbuild tonnage still to be delivered in the next three quarters, fleet managers will not be able to find employment for all their incumbent ships in secondary trades.

Moreover, although carriers will be able to return some chartered-in tonnage to owners, until recently the lessors were demanding –  and obtaining – at least minimum two-year time charters on their ships. So carriers will be stuck with surplus redundant tonnage, and paying elevated daily hire rates, for some time to come.