Ship orders have dropped to a record low as the scramble for scrapping vessels continues, with a total of more than 41.7 million tonnes of cargo from ships set to be scrapped in 2016, according to The Wall Street Journal.
Basil Karatzas, CEO of New York-based Karatzas Marine Advisors Company, said: “Given the tremendous overcapacity, it will take much more recycling and at least two to three years of no growth in capacity to see some balance between supply and demand.”
Anil Sharma, President and CEO of US-based Global Marketing Systems “Freight rates are dismal. So you either idle ships, if you can afford it, or recycle.”
PTI previously reported that the demolition of containerships had almost tripled in the first five months of 2016.
This move shows the continuing efforts of carriers to dispose of idle ships and to restore a balance in supply-demand in light of low freight rates, which has recently caused many carriers to see losses.
A recent Container Insight Weekly report from Drewry found that the three main causes of ship scrapping were due to the opening of the new Panama Canal, a widening gap between ocean transport supply and demand and the fear of continuing losses among charter owners.