The large number of very large container ships (VLCS) and ultra large container ships (ULCS) due to be delivered in 2017 is projected to be twice as high as 0.75 million TEU containership scrapping forecast for the year, according to Alphaliner.
The overall delivery figure for the year stands at 1.69 million TEU, and even accounting for a potential slippage of about 250,000 TEU, the projected capacity additions would still reach 1.44 million TEU.
Additionally, Alphaliner believes that the scrapping forecast could reach 3.4% this year.
“The relatively high fleet growth rate, compared to the low 1.5% growth rate recorded in 2016 when only 0.93 million TEU were delivered, will prolong the overcapacity and further delay the recovery in the container shipping market,” Alphaliner said, adding that the new ships will also boost the idle ship pool, which currently stands at 1.4 million TEU.
Furthermore, forced cascading, triggered by the incessant flow of ULCS newbuildings, is expected to continue creating havoc among smaller ship sizes, hampering any substantial rise in boxship charter rates.
Although weak market conditions could force owners to further delay the deliveries of some of these ships, this is unlikely to result in a significant increase in slippage numbers above Alphaliner’s current forecasts. Of the 1.67 million TEU due this year, some 78% is concentrated on ships above 10,000 TEU. In total, 55%, around 0.92 million TEU, is distributed on 54 vessels of 14,000-21,000 TEU.
Most of these 54 units are already earmarked for deployment on East-West services, including those to be launched from April 2017 within the new Alliances framework, and are therefore expected to be delivered on schedule.