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THE significant disparity between supply and demand in the ocean shipping industry has compelled carriers to employ a capacity-management strategy that has seldom been witnessed since the aftermath of the global financial crisis: super slow steaming, reports New York's Journal of Commerce.
BIMCO chief shipping analyst Niels Rasmussen reports that the average sailing speed of container ships in the previous month was 3.4 per cent lower compared to April 2019.
This slowdown in vessel speed is a reflection of the industry's efforts to absorb excess capacity caused by the current supply-demand imbalance.
"This has limited the supply that the fleet can deliver," said Mr Rasmussen.
"However, the total available fleet supply has significantly outgrown Far East export volumes."
He noted the global container fleet has grown 16.9 per cent over the past four years to reach 26.2 million TEU at the end of April.
The coming two years are expected to witness a scenario where capacity surpasses demand, as a substantial influx of new tonnage enters service. Analysts project a two per cent growth in global demand this year, while supply is expected to increase four per cent.
Looking ahead to 2024, capacity is predicted to rise seven per cent, while demand is projected to grow three per cent.
This indicates an imbalance with excess capacity in comparison to demand during these periods.
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