News / Idle ships rare as MSC doubles down on vessel spree despite overcapacity

MSC Jewel. Photo: VesselFinder

Carriers still seem unfazed by impending structural overcapacity as MSC continues its growth and vessel idling remains low.  

Recent data from maritime intelligence company Alphaliner has shown that the idle container ship fleet has been “virtually unchanged” across the past two weeks, despite the onset of liner shipping’s traditional year-end lull and sinking rates.  

As of 3 November, the idle fleet capacity accounted for 0.9% of the world’s 33m teu fleet, with only 94 vessels, or 298,538 teu, commercially idle.  

“The liner sector can be considered ‘fully employed’,” surmised the analyst.  

It noted that the slight 20,000 teu jump in vessel inactivity was primarily related to container ships that had just finished their drydocking and were awaiting a schedule slot to re-join commercial service.  

“While Alphaliner recorded marginally higher numbers, idling essentially remains a non-factor.” 

Graph: Alphaliner

“A return to a ‘structural’ tonnage oversupply could become increasingly likely in the coming years, given the massive wave of newbuildings,” warned Alphaliner.

“On top of this, a large-scale return to Red Sea – Suez routings would set free tonnage that is currently bound by Cape of Good Hope diversions .”

But undeterred by the threat of structural overcapacity, MSC has continued its shopping spree of second-hand container tonnage this week and has added three more vessels to its collection.  

“With these three further acquisitions, MSC has bought a mind-blowing 461 second-hand container vessels since it embarked on an unprecedented ship buying spree in August 2020, mostly in lieu of chartering tonnage,” said analysts at Alphaliner.  

The first of these is the 3,534 teu Rio Kobe, and MSC reportedly purchased the gearless 2009-built vessel for around $32.5m. 

Then, the Irenes Resolve, currently on charter to Hapag-Lloyd until Q2 2026, set MSC back $23m. The 3,739 teu containership boasts 800 reefer plugs and is a “good candidate for reefer intensive routes”, according to Alphaliner.  

The Geneva-headquartered shipping line also acquired the second-hand 4,600 teu Atlantica Power for over $45m but will not be able to operate the ship any time soon. 

The vessel is under a one-year time-charter to CMA CGM and was recently forward fixed by Maersk for a further 24-month charter that will end sometime around Q3 2028. 

The Rio Kobe is also understood to have just under 2.5 years of time-charter coverage remaining at an average rate in the high $20,000s per day. 

Maritime consultancy Braemar observed that there are few vessels on the market available to buy without time charters attached, forcing buyers such as MSC to turn to opportunities with charter cover attached.  

“It will be interesting to see how charterers respond to novation requests to competitors, particularly so soon after extending vessels on favourable terms to owners,” Braemar highlighted. 

“While they may have limited ability to block such sales, these transactions are likely to prompt further discussion.”