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International Cooperation Department
Tel.: (+86-21) 65853850-8034
Fax: (+86-21) 65373125
E-mail: ICDept@sisi-smu.org
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International Shipping |
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| Port loads 'explode'! Global Idle Container Ships Hit New Low Since Epidemic |
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Date:2024-07-01 Readers:
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Container ship idling has fallen to its lowest level since the epidemic, while port congestion has hit an 18-month high, due to a combination of factors including the geopolitical situation, the advancement of the peak season and capacity bottlenecks.
According to the latest data from Alphaliner, as global demand for container ship capacity continues to soar, the number of idle ships has fallen to a low level not seen since the epidemic. In the first half of this year, commercially idle tonnage accounted for just 0.7 per cent of the container fleet, which is similar to the level seen during the epidemic. This equates to around 210,000 TEU of the 29.6 million TEU global container fleet, in line with the figure recorded in the first half of 2022.
Specifically, 77 vessels with a total capacity of 217,038 TEU are currently idle. None exceed 18,000 TEUs and only two exceed 12,500 TEUs as shipping lines continue to seek any available vessels to maintain service.
Stanley Smulders, ONE's marketing and commercial director, has previously said, "If you look at all the statistics, there are no ships idle. Every ship is actually working and all shipping companies need ships at the moment."
Freight forwarder Flexport warned in its latest freight market update that the spike in spot rates will continue until capacity supply exceeds demand.
Lasse Daene, Flexport's senior manager for maritime transport in North Germany, added: "Unfortunately, the development of the spot market is having an impact on the long-term market. Long-term rates are currently lower than spot rates, so shipping lines are trying to limit the supply of capacity to LTAs and are using peak season surcharges to bridge the gap. This will continue until structural supply exceeds demand and loading rates in Asia start to decrease."
Alphaliner noted that with ships above 4,000 TEU becoming increasingly scarce, a significant increase in the number of upfront fixes is expected for larger vessels to be delivered later this year and next year. Whilst the current surge in demand is largely driven by short-term factors such as the Cape of Good Hope bypass and early peak season cargoes, it reflects the shipping companies' view that the Suez route is unlikely to recover anytime soon. In addition, the better than expected performance of the global economy, despite numerous geopolitical challenges, has led to higher than expected freight volumes, which explains some of the shipping lines' confidence.
Detouring to Africa has significantly boosted TEU-mile demand in the consolidation market, but one of the "costs" has been congestion in major ports.
According to maritime data firm Linerlytica, global port congestion has reached an 18-month peak, with 60 per cent of ships waiting at anchor in Asia. As of mid-June, more than 2.4 million TEUs of ships were waiting at anchor.
But unlike during the epidemic, this time it was not a buying frenzy by home-based consumers that swamped ports, but rather ships detouring to Africa to avoid the Red Sea causing schedules to be disrupted, missed sailings and fewer port calls. As a result, ships unloaded large quantities of cargo at large transhipment hubs like Singapore, which were reloaded onto different vessels for the final leg of the journey, with fewer port calls to meet the schedule.
Jayendu Krishna, deputy head of Drewry's maritime consultancy, said, "Shipping lines are responding to this by offloading containers at transshipment hubs." Drewry said average cargo offloading in Singapore surged 22 per cent between January and May, significantly impacting port productivity.
As the world's second-largest container port, Singapore has seen particularly heavy congestion in recent weeks. The Maritime and Port Authority of Singapore (MPA) said at the end of May that the average wait for container ships was two to three days, while container tracking firms Linerlytica and PortCast said delays could be as long as a week. Typically, berth wait times should be less than a day.
Neighbouring ports are also backlogged as some vessels are skipping Singapore, Linerlytica said, adding that the pressure has shifted to Port Klang and Tanjung Parapas in Malaysia.
Dellury expects congestion at major transhipment ports to remain high, but expects it to ease as shipping companies increase capacity and resume sailings.
Port operator PSA has reopened its old berths and yards at Keppel Terminal and will open more berths at Tuas Port to cope with extended waiting times, the MPA said.
However, Maersk, the world's second-largest container carrier, said this month it would skip two westbound flights from China and South Korea in early July due to heavy congestion in Asian and Mediterranean ports.
https://www.cnss.com.cn/html/gkdt/20240628/353936.html
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