Order book of 7.54mn TEUs signals significant change: BIMCO
Scheduled deliveries for 2024 and the remainder of 2023 are currently at 5.03 million TEUs
During the last 10 quarters, 8.61 million TEUs have been contracted, matching the level contracted during the preceding 30 quarters. "The order book has now increased for 10 straight quarters, reaching a new record high in each of the last four quarters. At 7.54 million TEUs, it now equals 28.9 percent of the existing fleet," says the latest update from BIMCO.
Niels Rasmussen, Chief Shipping Analyst, BIMCO says: “Despite the collapse in freight rates, shipowners still have an appetite for new container ship orders and the order book has continued to grow. The record high order book of 7.54 million TEUs will result in significant changes to the container fleet in the coming years.
"The large order book will result in significant fleet growth. Scheduled deliveries for 2024 and the remainder of 2023 are currently at 5.03 million TEUs. We estimate that recycling will hit nearly one million TEUs during that period and the fleet could therefore soon exceed 30 million TEUs for the first time, up 16 percent compared to today."
Delivery of the ships will also increase the fuel types used. As much as 57 percent of TEU capacity in the order book involves ships with some level of alternative fuels preparation compared to only 10 percent in the current fleet, the update added.
"The first ships using methanol will be delivered and the first ammonia-ready ships will also be launched soon. Five different fuels could be in use: low- and high-sulphur fuel oil, LNG, methanol, and ammonia. As the use of alternative fuels increases, it will become increasingly difficult to establish a single relevant rate benchmark for the time charter and asset markets."
Rasmussen adds: “The new ships will be more fuel efficient than most of the existing ships and the introduction of alternative fuels will help reduce their greenhouse gas emissions."
Ten years ago, the operators’ ownership share of the fleet capacity bottomed out at 50 percent but has since climbed to 61 percent. "This share will increase further in the coming years as 65 percent of the order book capacity is controlled by operators. Many of the non-operating owners’ largest ships are fixed on long-term charter contracts, and it is increasingly only smaller ships that operate in the short-term charter market. Combined with the increasing ownership share, operators’ ability to use the time charter market to quickly adjust fleet capacity is therefore decreasing."
LA Port ends Q1 on weak note
The Port of Los Angeles processed 623,234 TEUs in March, closing out a soft first quarter, says an official release. For the first three months of 2023, the port handled 1,837,094 TEUs, down 32 percent compared to 2022, which was the best Q1 in the port’s history, the release added.
“Economic conditions slowed global trade considerably in the first quarter; however, we are beginning to see some signs of improvement, including nine consecutive months of inflation declines,” says Gene Seroka, Executive Director, Port of Los Angeles. "While March cargo volume was lower than last year at this time, early data and monthly growth indicates a moderate increase in Q3.”
March 2023 loaded imports reached 319,962 TEUs, down 35 percent compared to the previous year. Loaded exports came in at 98,276 TEUs, a YoY decline of 12 percent. Empty containers landed at 204,996 TEUs, a 42 percent year-over-year decline.