How Important is the Growing Size of Container Vessels?



Kris Kosmala, Industry Thought Leader, Rotterdam/Singapore


Early 2020, the unaware pessimists were predicting total collapse of the container carriers, both on the revenue side and on the profit side.

The bulk commodities, except for crude oil tankers, were seen as immune to the containerised trade. The first half of 2020 seemed to bear those pessimistic sentiments.

According to Clarksons Research, in May 2020 nearly 12% of the entire global fleet was idle. Meanwhile, the ocean-going ships in service struggled with impossibility of crew rotations stranding thousands of sailors at sea.

At the time of writing we are not at the end of 2020 yet, but then, one year does not mean much, especially when measured against three decades of ship’s lifespan.

More big ships were added to the global container fleet in 2020 which will make the capacity game in years to follow very interesting.

These new arrivals represent orders placed for 24,000 TEU vessels a few years ago. Major buyers then included HMM and COSCO, but other lines kept growing their fleets as well.

Carriers adding capacity should be good news for the shippers continuously yearning for lower shipping costs. But the wisdom of investing applies here as well. Past performance is not a reliable indication of future outcomes.

This time around, the shippers should not expect the destructive miracle of near zero rates, the bane of the shipping industry a few years back. The culprit is the digitalisation. It has been talked to death in conferences, I know, but the results are finally showing up. This, and the concentration of supply within the three major alliances.

Fast forward to October 2020 and the reality demolished the pessimism abundant in March of 2020. The carriers acted much faster at reducing sailings and blanking capacity, in many markets much faster than the demand suggested.

Cookie Policy. This website uses cookies to ensure you get the best experience on our website.