Clarksons: Box Shipping Starts Addressing Its Problems

Image Courtesy: BSM

After 2016 brought a number of records, most of them of a gloomy nature, the year may well be seen as one in which the container shipping sector started to tackle its problems head on, according to Clarksons Research.

The container shipping sector has spent much of the post-financial crisis era under severe pressure and, as many expected, 2016 proved no real exception, Clarksons noted.

Box freight rates in general remained weak, and the SCFI Composite Index averaged 18% lower in 2016 than in 2015. However, by late in the year it appeared that spot freight rates might be bottoming out on some trade lanes.

Against this backdrop, charter market vessel earnings remained extremely challenged, at bottom of the cycle levels. Nevertheless, sector fundamentals appeared a little more positive in 2016, according to Clarksons. Demand conditions improved, with global volumes expanding by an estimated 3% in the full year to 181 million TEU.

Meanwhile, containership capacity growth slowed significantly in 2016, reaching just 1.2% in the full year. Deliveries plunged to 0.9 million TEU from 1.7 million in 2015, while demolition surged to a new record of 0.7 million TEU.

However, given the level of surplus built up, and in particular the impact of the delivery of substantial capacity, much of it in the form of new megaships, “the improved supply-demand balance seen last year was not enough to generate any significant improvement in market conditions” as the idle fleet stood at around 7% by the end of 2016.

“Further recalibration still appears to be necessary to generate better markets,” Clarksons said. However, 2016 might also be seen as the year in which the sector finally started to lay real foundations for a better future. Demolition hit a new record, and financial distress and regulatory requirements are expected to drive further recycling, while ordering of newbuild capacity dropped to just 0.2 million TEU during the year.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jun 2017 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 1 2

DSM17

Donsö Shipping Meet 2017 is an all inclusive exhibition. Meals, electricity, meeting schedule and banquette dinner is included…

read more >

TOC Europe

TOC (The Terminal Operations Conference) has long been considered best in class by container terminal operators and their suppliers…

read more >

Marine Philippines 2017

The 4th edition of PHILIPPINES MARINE 2017, SHIPBUILD PHILIPPINES 2017 and OFFSHORE PHILIPPINES 2017 is the only specialized Shipbuilding…

read more >

Bunkering Week 2017

IBC’s biennial Bunkering Week is back with its successful series of 3 co-located events: 8th Bunkering in Asia, 4th LNG Bunkering and EMTECH: Ship Emissions Technology Conference.

With a proven track record of bringing together top decision makers from various industry sectors, this remains the go to event for ship owners, fuel suppliers, traders and technology solution providers. Get in-depth and detailed market insights from experts who are taking the decisions, assess peer strategies and give shape to your own in this unrivalled gathering of shipping and marine fuel industry leaders.

Key Highlights for 2017:

* 3 Co-located Conferences

* 12+ Hours of Networking Time

* In-depth Review of Shipping Markets by Segment

* Ship Owner Positions on Emissions Compliance Scenarios

* Pricing Differentials and Availability across Different Fuels

* Technology and Analytics in Fuel Management and Emissions MRV

More info

read more >