The idle containership fleet has edged below 2% of the overall fleet for the first time since last September. Figures from Lloyd’s List Intelligence show that total capacity of inactive vessels fell to 335,640 teu last week, standing lower than for the corresponding week over the last two years, when 2.6% of the fleet was idle, Irish Maritime Development Office (IMDO) said in its Shipping Market Review for the week 21, 2014.
According to the Review, Handymax’s saw the greatest degree of inactivity with 107,428 teu idle, followed by the Panamax segment, which had 83,624 teu of inactive capacity.
Analysts Alphaliner expect further declines of idle vessel capacity over the coming weeks as ships either find employment or a finally scrapped.
Whilst the idle fleet is currently low, the CEO of A.P. Møller – Maersk has said he doesn’t expect a sustainable recovery in the short term.
“There is lingering overcapacity, so there will be pressure in the market in 2015, 2016 and probably 2017,” commented Nils Andersen.
The P3 Alliance of which Maersk is the largest member, is due to begin operations in the autumn and Maersk expects cost savings of $1 billion annually from the new network’s efficiencies. Mr Andersen commented that once P3 begins he expects smaller competitors to either merge or join other alliances, which could eventually lead to more balance in supply and demand.
When speaking about the tanker market, both clean and dirty segments suffer from overcapacity, based on IMDO’s report.
The global tanker market is experiencing low rates, with the crude sector really suffering with most routes providing very low earnings for owners, according to SeaTrade Global. VLCC trades out of the Gulf last week were earning just $6,000/day.
Suezmaxes also experienced paltry rates with only Med-Med voyages topping $10,000/day.
Aframaxes fared better, realising rates of around $20,000/day for the Gulf/East and Caribs/US Gulf routes but overall the crude sector has too many vessels and charterers are keeping ship-owners nervous by late disclosure of cargoes.
The product sectors are faring somewhat better; however weak market conditions and high levels of new tonnage are pressurising owners. A large part due to falling US gasoline imports as it benefits from its domestic energy boom.
The LR Atlantic market, which performed very strongly last year with earnings from $15,000 -$20,000 on average is now struggling below $10,000 a day.
The MR market is forecast to improve in the short run as single hulled vessels are phased out and some older tankers are retired, however a large new-delivery schedule will quickly lead to overcapacity.
IMDO, May 29, 2014; Image: GMA