2012 Brings Record Capacity
Weakening demand and soft ocean freight pricing over multiple trade lanes are already being seen. A lot of additional vessels are being added to the ultra-large sector, increasing the possibility of excess overcapacity in the Asia-Europe trade lane. Overcapacity has already been chipping away at ocean freight rates in this area since last year. The new ultra-large ships in the Asia-Europe trade lanes would be enough to create another five loops, each with 13,000 TEU vessels, according to the Journal of Commerce.
"Of the 230 ships due for delivery next year, 59 have a nominal container capacity of 10,000 TEUs or more, which will introduce an additional 0.8 million TEUs into this segment. The growth of containerships fleets in the size bracket of 10,000 TEUs or more is already expected to reach 70 percent year-over-year in 2011, and will grow by an additional 57 percent in 2012," as stated in a Journal of Commerce article.
Growth is projected to reach 2.9 percent in 2011 and is expected to reach 3 percent in 2012. Ocean shipping vessels of 10,000 TEUs and higher make up almost half of the global <a rel="nofollow" onclick="javascript:_gaq.push(['_trackPageview', '/outgoing/article_exit_link/5177294']);" href="http://www.shiplilly.com/"title="Ocean Freight">ocean freight</a> ship orders, by capacity. The Journal of Commerce states that "since January 2010, owners have ordered 1.7 million TEUs of capacity on boxships with a capacity of 5,100 TEUs or more compared with 0.4 million TEUs of smaller ships below 5,100 TEUs." They say that containerships of up to 5,100 TEUs make up only about 20 percent of the global orderbook.
Braemar has forecasted that the huge additions to the cellular fleet in the ultra-large sector will raise the threat of overcapacity for the Asia-Europe trade lane, in particular. Braemar also says that "because shipowners in Germany's KG investment market have largely gotten out of the business of ordering ships, investment in smaller container ships has been lackluster." However, Braemar expects renewed interest in feeder tonnage after the investments being made in post-Panamax ships dies down.
An article on MarineLog's web site states that "Fleet growth for the 10,000 TEU plus size bracket is expected to reach 70% year on year for 2011 and a further 57% in 2012."
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In March 2010, the average container shipping rates for moving a 40-foot container between two ports across an ocean rose to $2,716. In March 2009, the container shipping rates were $1,557. This was an increase of more than 74% on container shipping rates in a 1-year time span. The increase on container shipping rates on some routes is even more dramatic, with container shipping rates to Europe more than tripled.
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