Shift to big ships in full swing, Drewry says

Corianne Egan, Associate Editor | Aug 18, 2014 12:37PM EDT

A shift in the composition of the global container ship fleet from smaller ships to fewer but larger ones could result in a decline in the number of vessels on the water this year, the first decrease in 20 years, Drewry Maritime Research said.

The number of container ships afloat declined in the first half of 2014, according to Drewry’s latest Container Insight Weekly newsletter. The capacity of the scrapped ships averaged about 2,600 TEUs, much smaller than the ships being delivered to nearly all major trade lanes, illustrating the transition that is occurring.

“Not only are ships getting bigger, which is not unexpected, but also both the absolute number and the relative market share of smaller ships are falling,” Drewry said.

Drewry said that from March 2013 through March 2014, 192 ships were scrapped. Carriers are averaging about 55 demolitions per quarter. With about 230 ships scheduled for delivery in 2014, the number of demolitions and the number of new arrivals are almost the same. However, Drewry said there are currently 180 ships scheduled for arrival in 2015, and if demolitions continue at the same pace of about 200 per year, the global fleet could decline even further.

The average number of container ships going through the Suez Canal has been consistently dropping year-over-year, but tonnage is growing, evidence that ship sizes are growing.

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Still, the TEU capacity of the global fleet is slated to increase 6 percent this year and in 2015, according to Drewry. Ships in virtually all trade lanes are growing in size, and congestion has become a growing problem this year at several ports in North Europe and North America as ports struggle to integrate new equipment and technology to handle the massive ships. The Netherlands’ port of Rotterdam has already announced initiatives to combat congestioncaused by the influx of big ships, which impacts every aspect of port operations, not just at the berth.

The growth in ship sizes is showing up increasingly in industry data. For example, the number of container ships transiting the Suez Canal has been consistently down year-over-year since 2011, with the exception of June’s totals. However the total tonnage through the Suez moving via container ships is relatively flat, a clear indicator that there are fewer ships but they’re carrying more cargo.

Drewry also noted that due to the decline in smaller vessels, charterers will have a harder time finding smaller ships on the market.