According to Alphaliner, the inactive container shipping fleet hit 11.6% of total fleet in terms of capacity as at end of May. This is an all-time high in the industry.
As of 25th May 2020, 2.72 million twenty foot equivalent units (TEUs) of idle containership fleet has been recorded. 2 major reasons for this idling capacity are:
- Blank sailings by major global liners in response to the lower demand due to the Covid-19 pandemic
- Capacity removed from the market for scrubber retrofits.
Covid-19 pandemic forced the shutdown of most economies which affected employment and business adversely. As a result, consumer’s purchasing power declined significantly.
551 vessels were reported to be idling as at 25th May, 2020. Out of the number, 64 vessels were taken out for scrubber retrofits. That made up 571,858 teus, which means the vessels taken out of the trade (and purely idling) is more than 2million teus.
According to Alphaliner’s weekly newsletter the world’s two largest container lines – Maersk and MSC – account for the largest portion of the idle fleet with a combined total of 845,000 teu out of service. However, more than half this figure relates to vessels undergoing scrubber retrofits.
As countries around the world are gearing up to open their economies again, some carriers have been reported to re-instate some number of sailings, initially planned to be blanked according to Alphaliner.
Alphaliner said it expected the inactive fleet to peak shortly as lockdowns in many countries start to ease and demand recovers. “There are encouraging signs that carriers have over-estimated the level of demand contraction in May, and capacity shortages on certain routes have already started to push spot freight rates up.”
Specific to Asia, we have seen improvement in certain trading areas as compared to April and, although not representative of the global situation, some trades are starting to run full ships. With China taking lead to re-start the economy, and other Asian countries following suit to resume economic activities, outlook in the coming months is encouraging.
QEL Shipping Services