Global – An on-going increase in freight rates has caused the idle container fleet to drop by 47% over the past three months, announces the Baltic and International Maritime Council (BIMCO) in its latest analysis. The idle fleet was recorded lingering just above 900 000 TEU in mid-March but this figure had dwindled to around 480 000 TEU by mid-June.
Freight rates on the main routes went up in March, April, May and June. ‘As long as rates hold up well and slide only marginally, the idle fleet should continue to drop, as owners make services ready ahead of the peak season in August, ‘ remarked the association of ship-owners and brokers in its recent shipping market overview for the container industry.
Rate increases on Asia-Europe trade amount to US$ 1100-1300 per TEU, rising some 205% from an average of US$ 536 per TEU just before Christmas last year to the current level of US$ 1634, BIMCO reports. The hikes have been high enough to ‘lift carriers back to profitability’ on that lane, it adds.
Due to a recent downward trend in demolition prices, the pace of ship scrapping – which accelerated during the first five months of the year – is expected to subside considerably. BIMCO adds that while new ship orders remain low, this is set to change because the shipyards are frequently offering cheaper prices to fill their order books in an attempt to counter the 16% drop in containership orders.
Meanwhile, the Copenhagen-based association warns that the low prices for new ship orders may tempt owners who are looking to renew their fleets and replace older tonnage with novel designs and fuel-efficient ships despite the overcapacity currently ruling the market.
For more information, visit: www.bimco.org