Only six months after Hanjin’s nosedive into bankruptcy, the 93 vessels and more than 600,000 TEU capacity that left the market have helped maintain the industry afloat after many month of struggling with the tides.
Despite that after the Chinese New Year there has been a slight drop in freight rates, they are still way above the average for the same period the year before. But this brief recovery could be under threat due to the wave of new capacity entering the market.
Seen from outside of the industry, its as if the container transport market isisted on being its own worst enemy. Like that rebellious adolescent that insists on self-destructive conducts waiting for a different result… as if Hanjin’s bakruptcy hadn’t served the cautonary tale.
The threat of the mega vessels
After Hanjin’s bankruptcy, carriers continued to cancel sailings, redifining their basically ineffective alliances, and scrapped a record amount of containerships. This group of measures gave false hope that the industry would be gaining conscience of the importance of reducig capacity in a depressed market.
At end-February MSC received the 19,472 TEU MSC Rifaya, and within the next 30 days will take delivery of two more 19,500 TEU vessels. The almost 60,000 new TEU's will be inserted into the already-bloated Asia-North Europe routes, that have 340 ships in excess.
A good decision
Maersk also took advantage of the “big sale” in steel prices to order new vessels, but due to the industry’s current status decided to postpone delivery of nine 14,000 TEU ships for 2018-2019. In case demand should pick up, Maersk can rely on support from charter vessels.
The carrier’s sensitive decision has a direct impact on Korean and south China shipyards, the most affected by the decrease in the orderbook, having to reduce personnel and file for state financial assitance to subside.
The market is still unpredictible, and the only common denominator is a deepening crisis that has managed to stay on the edge of death for way too long.
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