News / Idle containership numbers fall again, but newbuilds and M&A are a threat

The number of containerships in hot or cold lay-up has fallen to 114, from 136 in the past two weeks.

According to Alphaliner, which warned that newbuild deliveries and M&A activity could reverse the downward trend.

The analyst said the amount of idle cellular tonnage had declined from 520,365 teu to 464,802 teu, or 2.2% of the total global fleet, due to “unusual strength during the traditionally slow winter season”.

Brokers are reporting strong demand in all the smaller sectors, including the hitherto challenged classic panamax vessels of 4,000-5,100 teu, of which there are now just 20 unemployed – the lowest level since 2015.

Charterers are being attracted to open panamax ships, which at a daily rate of around $7,500 are some $500-$750 cheaper than smaller 1,500-3,000 teu vessels, which remain in short supply.

Indeed, Alphaliner notes that just seven panamax ships are available in spot positions, compared with a year ago when some 90 vessels were looking for employment.

However, despite declining supply of tonnage, charter rates have flattened at historically low levels.

Alphaliner suggested the supply-demand equation was being overshadowed by the spectre of underlying overcapacity fears, as well as the “ever stronger bargaining power of the major carriers”.

Meanwhile, continuing strong demand for tonnage has put a brake on scrapping, with the number of ships sold for demolition slowing to just seven in the past 30 days.

According to data from London broker Braemar AGM, the total number of containerships demolished this year stands at 148 (419,000 teu). This compares with the 169 ships for 583,000 teu recorded at the same point in 2016.

In terms of new tonnage there have been 143 deliveries this year to date, equating to 1.1m teu. This includes last week’s 21,413 teu OOCL Scandinavia – the fifth in a series of six ULCVs ordered by the Hong Kong carrier.

There are 34 ships of 20,000 teu and above stemmed for delivery next year, which will need to be deployed on Asia-Europe trades. Alphaliner said it was “unclear” how the extra capacity could be absorbed, particularly if cargo demand should waver.

It said that, in this respect, “some pressure” was developing in the larger sectors of the charter market, and noted that the number of idled ships of 7,500 teu and above was on the increase, in contrast to smaller containership sizes.

Looking ahead, most of the concerns of brokers The Loadstar has spoken to recently relate to current and upcoming M&A activity in the liner industry. At particular risk are charter options and extensions coming up on Hamburg Süd charters, following its acquisition by Maersk, and similarly Japanese carriers K Line, MOL and NYK ahead of their merger in April.