Handheld orders will be 7.1 million TEU, with a capacity of 5 million TEU to be delivered in the next two years. The capacity growth of container shipping market will set a record high in 20 years.
market demand has led to a continuous plummeting container freight rates. In the next two years, the container shipping market will usher in an unprecedented wave of delivery. When the shortage of ships, containers and ports that have caused the prosperity of the container shipping market in the past two years are eliminating one by one, and the long contracts and environmental regulations that are regarded as market insurance are also being exposed one by one, and the risks of the container ships market are becoming increasingly dangerous.
5 million TEU capacity is to be delivered in the next two years! Will a large number of ships be idle next year and after?
At the beginning of this year, the three major shipping research institutions, Deluri, Alphaliner and Clarkson, all estimated that the market still has the most opportunities for supply to exceed demand this year, but the three major institutions have changed their expectations and believe that there will be oversupply this year.
, chief analyst of Xeneta, Norwegian shipping analysis platform, said recently that based on the current freight rate, most shipping companies can make profits with a capacity utilization rate of 50-60%, but if freight rates continue to decline, capacity management will face problems.
He warned that the possibility of "freight rates falling to lower than before the epidemic" cannot be ruled out, especially considering that handheld orders for container ships of up to 7 million TEU are still waiting to be delivered and the problem of port congestion is gradually alleviating. If the transportation companies want to avoid a sharp drop in freight rates in the next two years, they must slack a large number of ships.
Alphaline statistics show that in the first seven months of this year, although the number of new ship orders decreased from the average monthly 358,000 TEU in 2021 to 248,000 TEU per month, the handheld orders of container ships have increased by 1.2 million TEU since the beginning of the year, and currently reach 7 million TEU, equivalent to 27.6% of the existing fleet. The resulting delivery volume will greatly affect the market direction in the coming years, as there will be approximately 5 million TEU of new ships under construction to be delivered during the 2023-3024 period.
Container ship market experienced the most profitable two years in shipping history from 2021 to 2022. Therefore, ship owners have ordered more container ships. Alphaliner shipping analyst Stefan Verberckmoes said that the current container ship's handheld orders are 7.1 million TEU, equivalent to 30% of the existing fleet capacity. Most of these new ships will be delivered in the next two years, 2.34 million TEU in 2023 and 2.83 million TEU in 2024, while the average delivery volume in 2021 and 2022 is about 1.1 million TEU.
Alphaliner warned: "At a time when market demand stagnates, a large number of new container ships are about to be launched. However, the market may not be able to absorb all new capacity." The scale of upcoming delivery of
is unprecedented. Clarkson's historical delivery data shows that the average annual growth of in the container fleet between 2001 and 2020 was 970,000 TEU. And the delivery volume from 2023 to 2024 will be 2.6 times the average. According to Clarkson, new ship delivery volumes reached a record 1.7 million TEU in 2014, but that is still far below today's level.
According to Alphaliner statistics, in terms of handheld orders, Mediterranean Shipping firmly ranks first in the world, with handheld orders totaling more than 1.5 million TEU, equivalent to more than 33% of the existing fleet. Then there are Dafeisteel, COSCO Shipping Group , Ocean Network Shipping (ONE), and Hapag-Lloyd , but the capacity of these companies under construction is less than half of that of Mediterranean Shipping.
However, Alphaliner data shows that the top 10 integrated transport companies currently have significantly more capacity for ships leased by ships than for new ships under construction. For example, Mediterranean Shipping currently has about 2.5 million TEU of ships, 68% more than new ships under construction. The rental of the casino ship is about 1.8 million TEU, 2.5 times the new ships under construction. The charter capacity of COSCO Shipping Group is more than twice that of new ships under construction. Therefore, the integrated transport company can cancel the lease on the grounds that the lease expires to make room for the new ships it orders.
BIMCO expects that the total fleet capacity growth in 2022 will be 2.9%, reaching 8.0% in 2023. Together with 2.9% in 2020 and 4.5% in 2021, the fleet growth rate has exceeded the main route and regional trade freight volume demand compared with the pre-epidemic level. At the same time, congestion remains the main way to consume capacity supply.According to Sea-Intelligence, the congestion level reached 13.8% of the fleet size in January 2022, but it had dropped to 9.6% by May 2022.
BIMCO believes that congestion may continue to be the driving force for maintaining the market supply and demand balance for some time, but the entry into force of the existing ship energy efficiency index (EEXI) in terms of ship demand starting from 2023 may become a more important factor.
Assuming that ship demand in 2023 increases by 10%, congestion decreases by 7-8%, fleet size increases by 8%, cargo demand increases by 3-4%, BIMCO concluded that the market supply and demand balance will deteriorate in 2023, and lead to further decline in future lease rentals and second-hand ship prices.
freight rates continue to plummet! Experts: The freight trend cannot be returned
FreightsBaltic freight index (FBX), chief analyst Judah Levine, pointed out that the U.S. imports have been transferred in large quantities from the U.S. and West to the U.S., pushing up spot freight rates through the Panama Canal , saving the U.S. Eastern Airlines freight rates from the U.S. to the U.S. Eastern Airlines freight rates have fallen by 75% since the beginning of the year. In contrast, the U.S. Eastern Airlines freight rates have "only" reduced by 50% compared with the beginning of the year, and are currently similar to May 2021.
After 16 consecutive weeks of decline, the Shanghai Export Container Freight Index (SCFI) fell below the 2000 point level on September 30, only 1922.95 points left, down more than half from the historical high of 5109 points at the beginning of the year. Among them, the freight rate per FEU on the Far East-US West line has fallen to US$2,399, down more than two-thirds from the historical high of US$7,900 at the beginning of the year. The freight rate per TEU of the European Line and Mediterranean Line has also fallen below US$3,000.
However, BIMCO pointed out that the SCFI index grew almost uninterruptedly from late May 2020 to mid-January 2022, and the increase in during the period reached 491%. Therefore, although it has declined in recent months, the current freight rate is still at a high level.
In the first half of this year, the freight volume of liner company head-haul and regional trade fell by 0.2% year-on-year, but it was still 8% higher than the pre-epidemic level in 2019. The freight volume has only decreased by only a small decrease compared to 2021, which is difficult to explain the large-scale freight rate correction. BIMCO believes that it is necessary to seek explanations from the supply side. On the one hand, the fleet capacity continues to grow, and on the other hand, the impact of the Port of Serbia has been small so far this year, with increased capacity supply and slowing down slightly.
container ship lease and second-hand ship prices are the same as the SCFI index and CCFI index. The average daily rent for the 6-12-month period lease contract peaked in early April this year and has since fallen by 6.0%. The average price of a five-year-old second-hand container ship has dropped by 5.3% since April, but it is still 34.7% higher than the new shipbuilding price. This shows that there is still a willingness in the market to pay a huge premium for existing capacity, but it must be noted that second-hand ship sales and purchase activities have been reduced.
Overall, BIMCO said that although freight rates, rentals, ship prices and freight volumes all fell slightly, the stock market is still strong at present. However, the global economic situation is not optimistic, with inflation remaining high, interest rates rising and economic growth slowing down. In the second quarter of this year, the main and regional freight volumes shipped to Europe and Oceania regions decreased by 7.3% and 12.5% year-on-year respectively, while the freight volume shipped to North America increased by only 1.0% year-on-year.
The global economic headwind has an increasingly significant impact on the collective transportation market. Among all important main courses and regional trades, the traditional third-quarter peak season almost no longer exists in 2022. BIMCO predicts that freight volumes for main and regional trade may fall by 1-2% in 2022, and then increase by 3-4% in 2023.
However, BIMCO also pointed out that although freight rates are expected to drop, they are expected to not return to the extremely low levels before the epidemic.
Industry insiders said that is currently under the current situation of global inflation, economic recession, decline in procurement power, and global turmoil, and global transportation capacity continues to rise in the next two to three years, the freight rate trend may be "can't go back."
Not only that, the environmental protection regulations that the International Maritime Organization (IMO) will be on the road next year were originally predicted that ship owners would initiate measures such as shipbreaking, speed reduction and emission reduction, which can also reduce market supply; however, it is found that the influence of environmental protection regulations is probably mostly declarative. Next year, due to the lack of strict requirements, the impact will not be truly launched in 2024, which also means that the container shipping market will face real tests in the next two years.
International Ship Network
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-