Idle box ship fleet edges higher

Bruce Barnard, Special Correspondent | Jan 21, 2016 8:32AM EST

The number of idled container vessels over 500 twenty-foot equivalent units edged slightly higher in the first two weeks of the year and is set to increase as carriers axe sailings in the run-up to the Chinese New Year holiday, according to Alphaliner.

There were 337 unemployed ships as of Jan. 11, up from 331 two weeks earlier, the industry analyst said.

But unemployment, measured by capacity, shrank slightly to 1.35 million TEUs, or 6.8 percent of the global total, from 1.36 million TEUs, as the return of several 7,500 TEUs-plus ships to service offset the increase in the idled 500-2,000 TEU fleet to 107 vessels from 99 at the previous count.

The Panamax sector of 3,000-5,100 TEUs remains under pressure, accounting for the largest number of jobless vessels since November.

The recent fall in the Panamax unemployment rate was only the result of increased demolition activity, with 13 units of 3,400-4,900 TEUs sold for scrap in the past two months along with two post-Panamax ships of 4,651 TEUs and 5,390 TEUs, Alphaliner note

Demand for Panamax tonnage remains weak, despite some recent chartering activity, notably by Maersk Line, which has deployed some vessels as “extra-sailers” from the Far East to the U.S. East Coast and the Mediterranean to take advantage of demand ahead of China’s lunar vacation.

“However, there are no signs of any strong market demand during the pre-holiday period, with carriers starting to cut spot freight rates from China again, giving up part of the gains achieved from the Jan. 1 general rate increases.”

The number of vessels in cold lay-up is increasing as the charter market shows no sign of improvement, particularly for certain categories of ships.

In the past few days, six Panamax vessels have moved from spot locations to sheltered lay-up berths in Southeast Asia and more are expected to follow, according to Alphaliner.

The jobless fleet is expected to increase in February as carriers have already announced multiple sailing cancellations to coincide with the New Year holidays in China and across the Far East, which start on Feb. 8.