Report: Idle boxships near 750,000 TEUs

The idle containership fleet is on its way to reaching 750,000 TEUs or 6 percent of the world containership fleet, in early February, according to the information service AXS Alphaliner.

   In its most recent newsletter, it says lay-ups of this magnitude would surpass the levels reached in 1986 when U.S. Lines went bankrupt and 5 percent of all containership capacity was idle.

   Assuming that 100,000 TEUs will be scrapped in 2009, the net fleet growth should stand at around 14 percent this year, against 13.2 percent in 2008, it said. However, this growth figure does not take into account the 750,000-TEU capacity expected to lay idle in early February. The market will have to absorb this nonworking fleet, on top of the newbuildings, which would bring the actual growth up to 20 percent.

   AXS Alphaliner said the industry "needs more than a vigorous market to absorb such a fleet growth. The hangover will lapse well into 2009, with lights of hope in spring 2010."

   AXS also noted the falling price of oil may complicate matters, because if bunkers fall below $200 per ton slow steaming will no longer be cost efficient. It estimates about 35 large ships have been inserted into services where operators are slow steaming to reduce fuel consumption. If those ships return to normal speeds, those 35 ships would be freed up without any real employment prospects.

Source: American Shipper