Newbuild Capacity to Swell by 1.3 Million in 2016

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After a record amount of containership capacity was introduced to the world’s oceans in 2015, Drewry’s latest release looks at the operators that accepted delivery of these ships, as well as which trades they deployed them in.

There were 209 new ships that hit the water in 2015, adding some 1.7 million TEU to the fleet before any deductions for scrapping.

The average size of newbuild delivered was around 8,400 TEU, while a new maximum record of just under 20,000 TEU was attained.

The three largest carriers in the world – Maersk Line, MSC and CMA CGM – extended their dominance by taking on the most capacity (in TEU terms rather than the physical number of units), while the five leading carriers between them accepted two-thirds of all the new capacity.

Drewry found that the emphasis in 2015 was on the big ships; deliveries of more than 10,000 ships amounted to 55% in TEU terms of all deliveries.

However, just below that threshold the size category with the most new deliveries was the 9,000-10,000 TEU class with 39 deliveries aggregating 367,000 TEU.

At the top end of the range, there were a total of 24 new ships above 17,000 TEU delivered, adding a massive 446,000 TEU to the fleet.

Relatively speaking the Asia-East Coast South America (ECSA) trade saw a disproportionally high intake with 132,000 TEU of newbuild capacity added.

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Subsequently, the average size of ship on this trade has increased by 19% since the start of 2015 to 8,800 TEU as of March, 2016.

In Asia-North Europe the average size of containership deployed has grown by 16% over the same period to reach 14,100 TEU.

Considering that head-haul demand growth in these two trades fell by 14.5% and 3.4% in 2015, respectively, that is an awkward position for carriers to be in and goes a long way to explaining why each route has experienced a lot of void sailings as lines tried to minimise the supply and demand mismatch.

The intake of newbuilds in 2016 will not be as high as it was last year, but there will still be another 1.3 million TEU that has to be absorbed, with the majority of new ships being of the bigger variety.

Ships of 10,000 TEU or above now constitute approximately one-quarter of the cellular fleet on the water, having only taken up less than 5% at the end of 2011.

Drewry believe that share will only continue to rise as ships of that size currently make up around three-quarters of the total orderbook.

Looking further into the future carriers will have to continue to juggle new ship capacity with even more dexterity; new orders doubled in 2015 to an aggregate capacity of 2 million (90% of which were 10,000 TEU and above) that will have to find deployment before the decade is out.

We think there are reasons that the big ship obsession could be about to end. Research done by Drewry Maritime Advisors suggests that the economic argument for ordering ever bigger ships diminishes as they grow and actually reverses upon reaching 24,000 teu as ports struggle to turn them around efficiently and the total system cost rises.

The Drewry View: Carriers are running out of profitable trades to deploy the big ships. If we’re right that the economic imperative and the financial ability to order these ships is decreasing and we think there is a reasonable chance that the much needed breather from new orders will hold firm.

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