More space, lower cost?
What will be the effect on rates of idle ships returning to service?
The latest statistics from AXS Alphaliner have revealed that the number of laid-up ships is at its lowest level since July 2009.
This potentially has positive implications for forwarders and shippers, as the reintroduction of laid-up vessels into operation means that they may not be faced with such an uphill struggle when it comes to booking cargo on ships.
Since November, carriers have been “rolling” cargo – putting it on a ship other than the one it had been booked on – when they have been able to sell the space at a higher price, which has infuriated forwarders and shippers alike.
With demand high and supply low, carriers have also been able to increase rates on a whim, and introduce a plethora of surcharges, making it nearly impossible for forwarders and shippers to keep tabs on the going market rate.
But while the extra capacity should make space on ships a bit easier to find and increase the service levels forwarders receive from shipping lines, it remains to be seen what impact it will have on rates. So far, carriers have been disciplined in maintaining rate levels, but with new tonnage coming into the market this could change.
However, this comes down to how much of an increase to overall tonnage the re-introduction of ships actually represents.
If the fresh ships are replacing extra loader vessels – introduced to services to mop-up containers that couldn’t be loaded onto a particular service – or they are added to loops to increase the number of super-slow-steaming services, or replace vessels that are scrapped, then overall weekly capacity might not actually increase, making it easier for carriers to at least maintain current rate levels.
This potentially has positive implications for forwarders and shippers, as the reintroduction of laid-up vessels into operation means that they may not be faced with such an uphill struggle when it comes to booking cargo on ships.
Since November, carriers have been “rolling” cargo – putting it on a ship other than the one it had been booked on – when they have been able to sell the space at a higher price, which has infuriated forwarders and shippers alike.
With demand high and supply low, carriers have also been able to increase rates on a whim, and introduce a plethora of surcharges, making it nearly impossible for forwarders and shippers to keep tabs on the going market rate.
But while the extra capacity should make space on ships a bit easier to find and increase the service levels forwarders receive from shipping lines, it remains to be seen what impact it will have on rates. So far, carriers have been disciplined in maintaining rate levels, but with new tonnage coming into the market this could change.
However, this comes down to how much of an increase to overall tonnage the re-introduction of ships actually represents.
If the fresh ships are replacing extra loader vessels – introduced to services to mop-up containers that couldn’t be loaded onto a particular service – or they are added to loops to increase the number of super-slow-steaming services, or replace vessels that are scrapped, then overall weekly capacity might not actually increase, making it easier for carriers to at least maintain current rate levels.
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