Cancellations put the brakes on containership capacity growth.
CONTAINERSHIP delivery delays and cancellations, plus demolition, are having a huge impact on fleet projections, with annual capacity growth of little more than 5% now forecast for this year and next.
That compares with double-digit expansion that was being projected before owners began requesting deferrals and trying to get out of order commitments this time last year.
Clarkson Research estimates that 46% of containership capacity expected to join the fleet in 2009 had not been delivered by the end of the year.
Although cancellations are still a rarity, most yards have agreed to slow production schedules, with the result that Clarksons now estimates that the fully cellular fleet expanded by 6.3% last year, with the container capable fleet growing by just 5.2% in 2009 to 15.1m teu. That is way below earlier expectations of 13% growth that had been anticipated at the start of last year.
The much smaller rate of growth is expected to continue into this year and next, with Clarksons now looking for capacity to increase by 5.2% and 5.4% respectively.
But despite this development and signs of recovery in freight demand on key routes, the London broker is warning of a long haul before the container trades are back in equilibrium.
?While the outlook for the market balance in 2010 looks marginally brighter, the legacy of contracting trade growth in 2009 means that global box trade volumes are unlikely to get back to pre-recession levels until at least 2011,? Clarksons says in its latest Container Intelligence Quarterly.
?Although much reduced fleet growth expectations, coupled with a gradual recovery in trade, means that there is potential for the balance between supply and demand growth to steady in 2010, this is unlikely to be enough to make up for the huge trade deficit left over from the global crisis, and it may take a number of years for trade volumes to get back to pre-recession levels,? the company states.
?Additionally, if volumes do return, and freight rate restorations continue to be successful, this positive impetus to the market comes with the added threat of reactivating too soon the significant proportion of the fleet still idle. It is likely that market players will continue to feel the negative effects of the downturn for quite some time.?
Clarksons estimates that global container trade declined by an unprecedented 9.7% in 2009 to 123m teu, the first decline on record.
A slow rebound is now under way, with the broker forecasting 5.2% growth this year to 129.4m teu. But that would still be below the 2008 peak of 136.2m teu. Container trade growth is likely to accelerate to 7.5% in 2011, taking volumes up to 139m teu.
These growth levels are well below annual rates of more than 10% enjoyed between 2005 and 2007.
Breaking down fleet growths, Clarksons predicts that capacity in the 8,000 teu-plus sector will grow 20% this year and 22% in 2011, having expanded 18% in 2009.
In the 1,000 teu-1,299 teu size bracket, capacity decreased 0.8% last year and is expected to decline by the same amount again this year.
Clarksons estimates that nearly half the containership orderbook originally scheduled for 2009 delivery had not been delivered during the year.
?Subdued deliveries of fresh capacity have been combined with significant levels of demolition in an attempt to rein in capacity growth, and the smaller boxship sectors saw negative net fleet growth in 2009.?
At the same time, the newbuilding market continues to be stifled, leaving the orderbook at 36% of existing fleet capacity. At one stage it stood at 60%.
With the charter market still suppressed and 11% of the fleet inactive, ?it appears unlikely that 2010 will see significant contracting activity?, warns Clarksons.