Slow steaming changes game

:: www.americanshipper.com

Container-shipping analysts have drastically rearranged their view of the industry at the beginning of 2010 based on the assumption that shipping lines will continue with slow-steaming initiatives, as well as other measures aimed at reducing excess vessel capacity. That ocean carriers have been so diligent in pulling capacity, even as demand surged at the beginning of 2010, suggests that severe overcapacity forecasts through 2012 or beyond may no longer apply.

“We’re now forecasting that overcapacity could go away in mid-2011,” said Tan Hua Joo, executive consultant with maritime news service Alphaliner. “But that’s still 12 to 18 months before equilibrium is reached. Of course, this is only one of several possible scenarios, and it depends on slow steaming to continue, if the current 500,000 TEUs of capacity soaked up by extra-slow steaming grows to 1 million while demand grows.”Speaking at the Trans-Pacific Maritime conference in Long Beach, Calif., held in March by the Journal of Commerce, Joo
said nearly 20 percent of excess containership capacity has been soaked up by slow-steaming initiatives.
“There are 1.1 million TEUs of capacity Alphaliner thought would have to be idled that have been removed through various measures,” he said.Of that 1.1 million, 45 percent has been deferred, 40 percent has been soaked up through slow steaming, 15 percent has been scrapped, and 10 percent has been outright canceled. Slow steaming has had the most unexpected impact on capacity.


via www.americanshipper.com

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