Fewer Ship Deliveries will Boost Profits


Container shipping lines may be able to improve their loads and profitability with fewer ship deliveries in Q2 and Q3 of 2016, leading to better performance along the Asia-Europe route, according to the Journal of Commerce.

PTI previously reported that ship deliveries could still potentially create more profit for smaller carriers as organic growth helps to boost their position in the market.

Investment bank Goldman Sachs were reported as stating: “Looking into 2016, we see the impact of vessel upsizing moderating as serving ships will be larger by the end of 2015, and the introduction of the 18,000-20,000 TEU class vessel will generate an incrementally smaller capacity increase.

“We believe carriers’ actions, including ongoing service cancellations and a temporary loading cap on 18,000-20,000 TEU vessels, could be part of the tools, as adopted by the likes of Maersk Line’s Triple-E’s initial loading cap in 2013.”

Maersk recently placed an order for eleven 19,630 TEU ships which are expected to be delivered by the end of 2017.

The pace of newbuild ordering has caused concern within the industry, with claims that order volumes which surpass 18,000 TEU ships could push back the date over when supply and demand are expected to balance.

In spite of concerns pertaining to the spike in newbuild orders, the container industry is currently going through a period profitability as a result of lower freight rates.

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