Shipping lines lay-up box ships to increase freight rates du

Time: 2016-08-08 13:43
IN an attempt to drive up freight rates and load factors, container shipping lines are idling vessels of all sizes during the current peak shipping season.
More than 300 vessels with a combined capacity of 800,000 TEU were idle in early July, supposedly the start of the Asian export peak season. In the previous two Julys, less than a quarter of this capacity was idled, IHS Media.
A combination of low freight rates and muted demand on the transpacific must have played a part in the decision of carriers to lay up ships in July, according to Drewry Shipping Consultants.
"But we also speculate that carriers are trying not only to park unused capacity, but also to bring spot rates up by increasing load factors on remaining active ships," said the Drewry analyst.
Spot rates on the transpacific rose during the last week of July, but they remain below the levels reached at this time last year.
The G6 alliance's decision to drop the CC1 trans-Pacific service idled five of six ships of 6,600 TEU. The Ocean Three Alliance's suspension of its Manhattan Bridge service in mid-July idled nine vessels with an average capacity of 4,000 TEU.
An increasing number of 4,000-TEU to 5,000-TEU panamax ships are now idle following the opening of the expanded Panama Canal.
Perhaps more surprisingly, even the small ship segment below 3,000 TEU is seeing a trend towards inactivity, Drewry said. This is partly due to intense competition and overcapacity in the intra-Asia market.
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