Shock! There are more than 280 idle container ships in the world, with a total capacity of 1.2 million TEU
According to the latest information, the latest statistics from Alphaliner show that as of October 24, the number of idle container ships in dry dock or “looking for lease” has reached 284 in the world, with a total capacity of 1.2 million TEU. The idle container fleet has passed the 1 million TEU capacity milestone and is set to rise sharply as shipping lines prepare to suspend services rather than simply blank sailings.
It is reported that at the peak of demand in February this year, shipping companies had squeezed the market for every available container ship. Data recorded by Alphaliner showed that 154 vessels with a capacity of 442,000 TEU were idle at the time, many of which were in dry dock, representing just 1.8% of the global fleet.
Alphaliner said: “Weakening demand for freight and falling freight rates have prompted shipping companies to reduce some shipping and even temporarily suspend some east-west trade routes on major trade routes.” The number of blank sailings by the company has increased significantly, and some Asia-Northern Europe routes have even been canceled for several weeks. However, Alphaliner does not count a ship that has been idle for less than 14 days as idle, so the increase in the number of empty ships is not counted in the overcapacity analysis.
It is reported that at Maersk’s third-quarter earnings conference, Maersk CEO Søren Skou reiterated the company’s strategy of reducing capacity to meet demand. The speed of China’s export decline has made the reactive write-off strategy of shipping companies unable to prevent spot and short-term freight rates from falling, necessitating a more aggressive capacity reduction plan to avoid a collapse in contract freight rates. Some partners in the three major shipping alliances are understood to have called on their networks to adopt a wintering plan by mid-January 2023, the Chinese New Year holiday.
No shipping company wants to be the first to stop sailing and lose market share as a result. There are activists who want aggressive action and some on the sidelines who want to stay on the sidelines. But, for sure, everyone is suffering and worried about next year. Meanwhile, in the market, the increase in remaining tonnage has put more downward pressure on daily rates and significantly shortened the period. Alphaliner said: “Charter rates for classic Panamax 4,000-5,300 TEU have continued to drop over the past two weeks and are now typically 6 months at around $20,000 per day.”
In fact, a broker source said this week that owners are now ready to accept lower rates. They are talking to owners and charterers of some vessels about extending the deadline by 30 to 45 days, and for new vessels, it’s three to four months. The rate of $20,000 per day for container ships is still good by historical standards but this is 10 times lower than what can be achieved in early 2022.
