Container shipping market looks up in 2010.
The prospects for the container shipping market are looking much better than 12 months ago, as both volumes and rates have been rising recently and the increases "appear to be to be resilient," according to the Paris-based consultancy Alphaliner. It points towards growing "optimism among operators with a stronger-than-expected surge in demand in the pre-lunar new year period to mid-February."
Other positive signs it said include the extra slow steaming technique "absorbing excess capacity quicker than anticipated, especially for the larger vessel sizes."
Furthermore, the Shanghai Containerised Freight Index (SCFI) recently surged by 7.2 per cent as spot rates on both Asia-Europe and Asia-US trades "went up considerably as a result of the rate increases imposed by carriers."
The world's idle container fleet has decreased by 142,000 TEU as the number of idle ships dropped from 581 units at the beginning of January 2010 to 532 units at the start of February, according to Alphaliner's records.
"Despite this, the idle fleet still remains high at 10.4 per cent of the total cellular fleet with a significant number of fresh deliveries expected in 2010 that could add to the overall capacity surplus. The level of deliveries this year is expected to be higher than the growth seen in 2009. Deliveries in January 2010 alone have reached 30 ships for 133,000 TEU - the highest level of deliveries recorded. The surplus capacity would continue to put pressure on charter rates," Alphaliner said.
With regard to charter rates, it said that rates rose for postpanamax size vessels in January due to a shortage of large vessels, while "charter rates for other vessel types remain largely stagnant."
It went on to say: "However, a two-tier market appears to be developing, with longer term charters for 60 months at 50-70 per cent above current rates for charters of two-12 months with flexible redelivery.
"This suggests that charterers are expecting rates to climb in the medium term, though short-term prospects remain poor.
"Some carriers seem to be securing ships for longer periods at rates that are higher than current spot rates, but which are still at advantageous levels, in the hope that future charter rate hikes could make the current 60 month charter rates cheaper than the expected average for the five years to come.
"On their side, some non-operating owners seem prepared to accept such rates which are still below historical average and may deprive them of future profits. This could be due to the need to secure immediate income for some of these cash-strapped owners." Alphaliner added that "immediate prospects remain poor as there is still significant overcapacity in most size segments." It highlighted that there are currently 144 ships ranging in size between 1,000 and 2,000 TEU that are idle, and 54 newbuildings in this size range are due to join the world box fleet in 2010.