This year will be yet another challenging one for the container industry in terms of capacity management – but a large number of scrubber retrofits will help carriers cope, said UK consultancy Drewry
Drewry’s Container Insight Weekly said the unadjusted orderbook calls for an extra 1.2M TEU to be added to the fleet in 2020, of which 532,000 TEU is comprised of 23 ultra large container ships (ULCS) for HMM, CMA CGM and MSC.
Drewry said “The current delivery schedules for the new ULCSs are spread evenly through 2020, which should make their integration easier than if they arrived en masse.”
Removing unwanted capacity through void sailings would help and a large number of scrubber retrofits will also assist. The consultancy said as of late December 2019, there were still some 260 units with an aggregated capacity of nearly 2.4M TEU pending retrofits. “So, the idle fleet will continue to remain high for a few more months at least, while reported yard delays will keep ships out of service for longer than expected,” its said.
Therefore, while Drewry acknowledges that capacity management will continue to be challenging this year, “we don’t believe the current delivery schedule is anything that lines will not be able to cope with”.
It said “We expect the market to continue in much the same manner as it did last year; lines will remain price-takers as the supply-demand fundamentals will work against them, although they will be able to remain profitable so long as operating costs are kept in check. It will be a tightrope act and the capacity levers of idling and void sailings will be pulled frequently.”
Drewry said its view was that the container industry is now “battle-hardened to cope with another challenging and unpredictable year. Much like last year, carriers should be able to return solid, if unspectacular results and continue to prepare the ground for a better future.”