Demand Still Strong for Smaller Ships


The demand for smaller containerships is set to carry on in the near future as larger ships are only applicable for a select number of trade routes, due to land-restrictions on most other trades, according to the latest Container Insight Weekly Report released by Drewry Maritime Advisors.

There are approximately 5,200 containerships sailing between ports worldwide and around 85% belong to the sub 8,000 TEU sector.

Ships of 8,000 TEU and above currently account for 41% of the total fleet and with around 90% of the orderbook residing in that sector, it is only a matter of years before they take ascendency and will depend on how many of the smaller ships are scrapped.

PTI previously reported Drewry as saying that ship scrapping is slowing and that it is not the answer to the industry’s overcapacity issues.

Out of the 12 deep-sea trades, only three currently are served by average ships of above 8,000 TEU.

As more of the physical restrictions are lifted, including the Panama Canal expansion, which is due to be completed in April, 2016, the average size of ships on these trades will continue to rise, some faster than others.

Average size in teu of containership deployed by trade, November 2015. (Source: Drewry)

Drewry believe this to be a gradual process and in the meantime ships of 8,000 TEU or less will continue to be required on the lower-volume, intra-regional and domestic trades that cannot yet accommodate the bigger vessels.

Such categorisation of ship sizes has only become valid in the last 12 years as before 2003 all containerships were below the 8,000 TEU threshold.

The super-sizing of containerships has seen the maximum size jump by 138% to over 19,000 TEU, with even bigger units on their way.

Drewry argue that while there are many more of the smaller 8,000 TEU ships physically out on the water when measured by TEU, the ratio is moving towards the bigger units.

With no scrapping or change to the current delivery schedule, the capacity of 8,000 TEU and above ships will overtake the 8,000 TEU or less units during 2019.

The most popular ship sizes within the entire 2015 order book have been those between 1,000-1,999 TEU and 2,000-2,999 TEU, both of which have received orders for 29 units.

The next most popular is the 19,000-19,999 TEU range with 25 new orders.

Drewry View: Bigger ships are drawing much more investment and attention but that doesn’t mean the smaller ships are being ignored, or are not needed.

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