Record blanking as supply races ahead of demand in container shipping

A perfect storm of newbuild containership deliveries, weakening demand and a dearth of scrapping candidates is throwing the supply/demand balance hugely out of kilter.

Shipowner association Bimco said it expected a “slight improvement” in the balance next year, but nevertheless added that trade, freight rates and time-charter rates would remain weak.

In its third-quarter overview and outlook publication for the industry, Bimco has downgraded its global container volume growth for this year to an anaemic -0.5%, from +0.5%.

This is in contrast to its revised 2023 fleet growth forecast of 7.9%, as a result of record newbuild deliveries of 2.3m teu of tonnage.

And Bimco has reduced its ship recycling estimate for the year, to just 200,000 teu, as shipowner heads refused to be turned by demolition prices that are only a third of the current asset values of their older ships.

For example, Sea Consortium recently fixed the 17-year-old 1,712 teu Rijnborg on a five-month charter, with an option to extend, at a daily hire rate of $13,000. According to Vesselsvalue data, the handy container vessel has an asset value of $9m, but a scrap value of only $3m.

This toxic mix of soft demand and a chronic oversupply of tonnage has forced ocean carriers to slam on the brakes and blank a massive amount of capacity before, during and well beyond, the Chinese Golden Week holiday in the first week of October.

Analysis by Sea-Intelligence reveals that in the past two weeks, a further 29 Golden Week blank sailings have been announced on transpacific tradelanes, with 18 more voided between Asia-Europe.