OCEAN carriers hope to improve the speed and efficiency of cargo movement since demand dropped 20 to 30 per cent in Q2 2020, reports the American Journal of Transportation.
Paris-based Alphaliner concluded that at the end of 2020, the inactive fleet use was only 2.5 per cent, while 62 per cent of ships are under repair and other services.
January usually marks the beginning of capacity reductions due to Chinese New Year when factories in Asia are closed, but that is different this year, as carriers will make the best possible use of this time to clear volumes out of Asia.
Carriers are sharing capacity, as well as joining vessel sharing agreements to help maximise efficiency. However, carriers aren't abandoning capacity investments for the future.
"Despite the fears of a market collapse at the time of the Covid-19 outbreak, 2020 concluded with a significant increase in ordering activity," said Alphaliner.
Meanwhile, global order for new container ships grew to 10 per cent of global capacity.
The pandemic has hindered the industry in multiple ways, such as container, labour, and equipment shortages, as well as volume overloads and the decline of the global supply chain.
Manufacturers and retailers normally operate with months and years of planning in global supply chains. Carriers invest billions based on expectations for the next 25 to 30 years, making the Covid crisis challenging for carriers to predict their future.
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