Unemployed Container Ship Numbers Mounting

All sizes and capacities affected; as many as 210 ships now languish awaiting work.

With container ship operators increasingly feeling the pinch from a shrinking economy, out-of-work ocean liner capacity has reached 550,000 TEUs. This represents an increase of 30 percent from December 2008 figures. The liner industry WEB site AXS-Alphaliner was reporting this week that 210 vessels were without work as carriers continue to curtail service on various key routes in response to sharply falling demand.

The current situation is estimated to be at least as bad as that experienced back in 2002, when at one point, ship capacity totaling about 180,000 TEUs were idled. The world fleet was not nearly as large at that time, but the current figures fully illustrate the depth of the current downturn.

With as many as 125 of the 210 idled vessels coming from the charter market, the slump in demand extends across all markets. Far East-Europe service suspensions and volume reductions on regional or feeder services are all contributing to the current numbers and the latest AXS-Alphaliner report also said, “The total capacity on offer on the three main east-west routes has dropped by 11.5% during the five months period extending from August 2008 to January of this year.” But the capacity cuts extend across virtually every global routing.

In December, it was reported that year-over-year cargo volume at the nation’s major retail container ports fell for the 16th straight month in November, leaving 2008 on track to be the slowest year since 2004 as the U.S. economic downturn continues, according to the monthly Port Tracker report released by the National Retail Federation and IHS Global Insight. The numbers reported by AXS-Alphaliner this week certainly do not give any reason to believe that that trend has changed. Unemployed containerships, as of the third week in December, represented as much as 3.5 percent of the world’s container fleet. - MarEx