My OperaContainership lay-ups set to triple in 2010 ( Posted by NDN-GMDUIH)
Monday, March 2, 2009 3:17:15 AM
Containership lay-ups set to triple in 2010
Friederike Krieger, Hamburg - Friday 27 February 2009
Idling ships at Subic Bay
ONE quarter of the world’s containership fleet will be in lay-up by 2011 and freight rate will not pick up significantly until 2014, Claus-Peter Offen, one of Germany’s largest shipowners, has forecast.
“About 1m teu is already idle. This number will double in 2009 and triple in 2010,” the shipowner told a ship finance forum in Hamburg.
Mr Offen plans to lay up 10 containerships, each with a capacity of 1,200 teu-2,500 teu.
“Lay-ups are necessary to cope with the current crisis,” Mr Offen told the eighth annual German ship finance forum, arguing that the market for containerships is suffering from massive overcapacity.
“Since we do not know when demand is coming back we had to concentrate on the supply side,” he said. “But we won’t see as many cancellations of [containership] newbuildings and scrappings as in the bulker sector.”
He expects only 10%-15% of containership orders to be cancelled and 1%-2% to be scrapped in the next few years, due to heavy downpayments and the fact that the container fleet is relatively new.
The global financial downturn is not the only cause of this situation. “The crisis led to a fast decline in demand, but we would have been faced with overcapacity anyway,” said Mr Offen.
“We have been too optimistic in believing that the double-digit growth will continue and ordered too many ships.”
Worldwide, there are about 750 containerships above 3,000 teu on order, with 150 of these ordered on speculative basis without a charter contract.
The shipbuilding industry was far more optimistic than owners and had enlarged its capacity drastically, Mr Offen said. “A lot of these additional shipyards will disappear,” he said.
Although he would welcome the postponement of newbuilding delivery dates from Korean yards, he does not expect this to happen on a large scale.
“South Korean shipyards would have to face severe currency losses since they have already sold forward their dollar income for the ships and would have to buy more expensive dollars to fulfil their foreign exchange deals.”
He expects the overcapacity in container shipping to peak around 2011 as there are many newbuildings due for delivery in the next three years.
From 2012 the market for newbuildings will have completely dried up and overcapacity will decrease.
“Four years from now the charter rates may rise again and another two years later supply and demand may be in balance again,” he said.
Most of the German KG houses will survive the downturn, he said. “People will invest in ships again. There are a lot of containerships with long-term charters involving good addresses which are attractive for investors.”
Some 30% of Offen’s ships will complete their charters in the next three years. “Because of that we won’t pay dividends for these ships, but the remaining 70% are fine,” he said.
Lloyd’s List this week reported that container lines could see $68bn wiped off their global revenues this year if freight rates stay around today’s record lows, which represents almost a third of industry income in 2008.
A quarter of world boxfleet will be in lay-up by 2011
Friederike Krieger, Hamburg - Friday 27 February 2009
Idling ships at Subic Bay
ONE quarter of the world’s containership fleet will be in lay-up by 2011 and freight rate will not pick up significantly until 2014, Claus-Peter Offen, one of Germany’s largest shipowners, has forecast.
“About 1m teu is already idle. This number will double in 2009 and triple in 2010,” the shipowner told a ship finance forum in Hamburg.
Mr Offen plans to lay up 10 containerships, each with a capacity of 1,200 teu-2,500 teu.
“Lay-ups are necessary to cope with the current crisis,” Mr Offen told the eighth annual German ship finance forum, arguing that the market for containerships is suffering from massive overcapacity.
“Since we do not know when demand is coming back we had to concentrate on the supply side,” he said. “But we won’t see as many cancellations of [containership] newbuildings and scrappings as in the bulker sector.”
He expects only 10%-15% of containership orders to be cancelled and 1%-2% to be scrapped in the next few years, due to heavy downpayments and the fact that the container fleet is relatively new.
The global financial downturn is not the only cause of this situation. “The crisis led to a fast decline in demand, but we would have been faced with overcapacity anyway,” said Mr Offen.
“We have been too optimistic in believing that the double-digit growth will continue and ordered too many ships.”
Worldwide, there are about 750 containerships above 3,000 teu on order, with 150 of these ordered on speculative basis without a charter contract.
The shipbuilding industry was far more optimistic than owners and had enlarged its capacity drastically, Mr Offen said. “A lot of these additional shipyards will disappear,” he said.
Although he would welcome the postponement of newbuilding delivery dates from Korean yards, he does not expect this to happen on a large scale.
“South Korean shipyards would have to face severe currency losses since they have already sold forward their dollar income for the ships and would have to buy more expensive dollars to fulfil their foreign exchange deals.”
He expects the overcapacity in container shipping to peak around 2011 as there are many newbuildings due for delivery in the next three years.
From 2012 the market for newbuildings will have completely dried up and overcapacity will decrease.
“Four years from now the charter rates may rise again and another two years later supply and demand may be in balance again,” he said.
Most of the German KG houses will survive the downturn, he said. “People will invest in ships again. There are a lot of containerships with long-term charters involving good addresses which are attractive for investors.”
Some 30% of Offen’s ships will complete their charters in the next three years. “Because of that we won’t pay dividends for these ships, but the remaining 70% are fine,” he said.
Lloyd’s List this week reported that container lines could see $68bn wiped off their global revenues this year if freight rates stay around today’s record lows, which represents almost a third of industry income in 2008.
A quarter of world boxfleet will be in lay-up by 2011
