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A record level of new containership deliveries in the next few months is expected to add further downward pressure on freight rates that are already below break-even on the Asia-Europe trade.
According to Alphaliner, a total of 26 ships for 168,000 TEU had already been delivered in this month, putting April on track for the highest level of monthly deliveries on record – 32 ships totalling 226,500 TEU, the market intelligence provider said in its weekly newsletter.
A further 41 ships of 204,000 TEU are due in May, bringing total deliveries in the first five months of this year to 688,000 TEU.
Cooling demand, combined with the high level of newbuilding deliveries and the return of idle capacity, is bringing back the spectre of vessel oversupply, Alphaliner said.
This has led to a significant fall in spot market freight rates, especially on the Asia-Europe route.
Carriers continued to add capacity to the east-west routes, largely outpacing withdrawals through cascading. Shipping lines now express fears that any serious oversupply on the east-west routes could lead to excessive vessel cascading into the north-south trades.
This would further accelerate rate decline in these trade areas.
Total deliveries in 2011 are expected to reach 1.35 million TEUs, based on Alphaliner’s figures, which are already adjusted for delivery deferrals.
Cellular capacity growth this year is forecast at 8.6 percent, including provisions for scrapping. Hence, the demand-supply balance is gradually moving against the shipowners’ favour.
Cargonews Asia
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