Container Ship Fleet Grows 10 Percent

Capacity gains outpace growth in demand, hitting rates and vessel utilization, Alphaliner says
Capacity aboard the active container ship fleet has grown 10 percent in the past year, running ahead of cargo demand and putting pressure on freight rates and vessel utilization levels in a lackluster peak season, according to Alphaliner.
Carriers have boosted capacity on all routes with the secondary line-haul markets in South America and Africa seeing the largest percentage increases, the container market analyst said.

Capacity gains outpace growth in demand, hitting rates and vessel utilization, Alphaliner says
Capacity aboard the active container ship fleet has grown 10 percent in the past year, running ahead of cargo demand and putting pressure on freight rates and vessel utilization levels in a lackluster peak season, according to Alphaliner.
Carriers have boosted capacity on all routes with the secondary line-haul markets in South America and Africa seeing the largest percentage increases, the container market analyst said.
The world’s active fleet reached 14.95 million 20-foot equivalent units on April 1, an increase of 1.33 million TEUs over the past year. The recent withdrawal of capacity on the main Far East-Europe and Far East-North America trade lanes has largely resulted in the redeployment of tonnage to secondary routes.
As a result, capacity jumped 20 percent on African routes during the past year, 14 percent on the Trans-Atlantic and 13 percent on Latin American trade lanes.
Despite capacity cuts, the Far East-Europe route is under pressure from a 12 percent year-on-year increase in supply, with 430,000 TEUs added to the trade.
The arrival of new vessels onto the trade has increased weekly capacity by 32,000 TEUs to 400,000 TEUs, accounting for a third of the total worldwide increase in capacity in the past 12 months.
With cargo demand growing much more slowly, vessel utilization rates have remained weak.”Over the past twelve months this has put considerable pressure on freight rates,” Alphaliner said.
All ultra-large container ships delivered in the past year were deployed on the Far East-Europe trade, despite average utilization levels of only 84 percent in the first half of 2011, according to Alphaliner estimates.
Recent withdrawals of capacity helped keep the trans-Pacific to a relatively modest 6 percent hike over the past year. Utilization levels, however, are weak because growth in demand has been lackluster since December.