Record High for Idle Container Ships

The global idle containership fleet hit a record high in 2015 reaching nearly six times that of the start of that year.

Analyst Alphaliner reports that idle capacity was 1.36 million TEU at the end of 2015 compared to 0.23 million TEU at the beginning of the year.

A record level of vessel deliveries saw 214 new container ships enter the market in 2015, says Alphaliner. These new ships added 1.72 Mteu to the global fleet, while only 0.20 Mteu were removed as a result of scrapping, conversions or casualties.

This meant the cellular container ship fleet reached a total slot capacity of 19.94 Mteu at the end of 2015, growing by 8.5 percent over the 12 months. 

At the end of December, average China Containerized Freight Index (CCFI) freight rates from China were 32 percent lower than a year ago, and charter rates fell by 23 percent year-on-year. Both freight and charter markets crumbled under the pressure of the severe imbalance between demand and supply, says Alphaliner.

Tier III taking effect

In 2015, there were 255 new vessel orders, with a capacity of 2.34 Mteu, indicating the weak market was not deterring shipowners from new tonnage, but a large number of the orders made were driven by the new IMO Tier III requirements. 

More expensive solutions are required to meet the stricter NOx emission standards of IMO Tier III for ships with keels laid after January 1, 2016. The IMO Tier III engine requirements reduce NOx emissions by approximately 76 percent in comparison to a Tier II engine. 

The requirement only applies to new vessels and engines, and is relevant for all vessels with keel-laying on or after January 1, 2016, with engine output of 130kW and above, when operating in North American and U.S. Caribbean Sea Emission Control Areas.

In future ECAs that regulate NOx emissions, the Tier III standards will apply to ships with keel-laying on or after the date of adoption of the ECA.