Boxship ordering rush pushes orderbook-to-fleet ratio towards 15%

Boxship ordering rush pushes orderbook-to-fleet ratio towards 15%

A spate of orders from Taiwan is pushing the container orderbook-to-fleet ratio back to above 15% territory again.

Citing Evergreen and Yang Ming’s recently announced 20-ship each expansion plans, analysts at Alphaliner report that the total containership orderbook is now more than 2.8m teu, or 13.2% of the existing fleet in slot capacity terms.

The orderbook-to-fleet ratio had fallen to only 12.4% in August last year – an all-time low.

“This downward trend now looks set to be reversed as carriers eye fresh fleet renewal programs for 2020, when new SOx and ballast water management rules are due to come into effect,” Alphaliner noted in its most recent weekly report, going on to mention a likely impending giant order, covered already by Splash, from South Korea’s Hyundai Merchant Marine (HMM).

A recent report from consultants McKinsey warned that overcapacity in the liner trades is here to stay. McKinsey stated the current supply of container capacity afloat is about 20% greater than demand.

Another report published this week from S&P Global Ratings was bearish on liner prospects for 2018, largely thanks to the swathe of new ships under construction at yards across Asia. For container shipping, S&P was concerned at liners’ continued poor supply discipline with new orders likely leading to flat, or even slightly depressed rates for this year.

Meanwhile, the idle fleet has in recent days fallen below 1%, with Alphaliner reporting a sharp drop in the past fortnight as carriers rushed to add capacity to take advantage of the high pre-Lunar New Year holiday demand in East Asia.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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