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Global Ship Lease, Inc. Message Board

  • play_tow play_tow Jul 20, 2011 10:50 AM Flag

    Order Book Issues Coming?

    Containership orderbooks bulge

    Katerina Kerr | Tue, 19 Jul 2011

    An overhang of surplus capacity will continue to plague the industry, warns analyst

    Vessel deliveries are expected to hit a record high in 2013. Meanwhile, carriers are bracing themselves for a weak peak season following dwindling demand since Q3 last year.

    According to Paris-based analyst Alphaliner, the high number of new ships on the way and the current capacity overhang – the result of a tonnage surplus build-up since 2008 and reactivation of idle tonnage – point to a weak market outlook for the next two years.

    To date, the amount of capacity scheduled for delivery in 2013 has reached 1.73 million teu, exceeding the previous annual high of 1.57 million teu delivered in 2008.

    Alphaliner warned: “With the delivery schedule over the next two years to remain firm against an expected sluggish demand, carriers must anticipate further market weakness.

    “The market fundamentals are looking less favourable, compared with last year, as an overhang of surplus capacity will continue to plague the industry.”

    The analyst explained: “The strong carrier earnings of 2010 had raised the market’s expectations, setting the stage for a significant reversal in 2011.”

    The capacity growth rate is expected to reach 8.7% a year both this year and next, with deliveries expected to reach 235 ships or 1.44 million teu in 2012 and 213 ships (1.34 million teu) this year, according to Alphaliner projections.

    And the analyst warned that the number and capacity of vessels scheduled for deliveries in 2013 were cause for even greater concern.

    “Most carriers continue to pile up new vessel orders and the order wave does not appear to be coming to an end anytime soon,” it said.

    “Deliveries are expected to reach a new record of 1.73 million teu in 2013. This number could rise over the next few months as some yards continue to offer container vessel building slots for 2013 deliveries.”

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