Slowing Ship Growth to Quell Overcapacity?

Global containership capacity is set to see the slowest rate of growth in more than 25 years – increasing at a rate of 4.6% in 2016, which is could ease the effects of overcapacity, according to gCaptain.

Data specialist Alphaliner, which has been monitoring the market, said: “Falling below the previously smallest year-on-year increase of 5.5%, recorded in 2009… will register well below the average annual growth rate of 10.3%, recorded since 1990.”

Peter Sand, Shipping Analyst for BIMCO, said: “The new normal level of demand is somewhat lower than originally expected – just as global GDP growth keeps disappointing us.”

In a previous article, PTI reported that leading shipping company Maersk Line is anticipating a demand slump of around 1-3%, which could be the lowest in the last 30 years.

Drewry Maritime Research recently released a container insight weekly report which revealed that fully cellular containership growth was reaching 20 million TEU and that overcapacity will need to be addressed if the industry is to restore balance.

Overcapacity has been an ongoing issue since the economic crash of 2008, with carriers struggling to find the vast demand needed to justify current fleet capacities.

However demand will have to catch up to capacity before significant change is witnessed.

Another issue may be that while capacity is seeing a slow in growth, ship sizes are still hitting record highs, which has its own ramifications independent of the size of the global fleet’s capacity.