Idled ocean container capacity has reached a record 800,000 TEUs (twenty foot equivalent units) with 303 ships at anchor as carriers cut or consolidate services on east-west routes amid declining traffic and freight rates.
The unemployed figure represents 6.5 per cent of the world fleet, twice the 3.2 per cent recorded in the depth of the 2002 bear market, according to AXS-Alphaliner, a Paris-based consultant.
That figure was calculated before Senator Lines announced its shutdown.
The idled fleet grew by 48 ships of 125,000 TEUs in the last two weeks of January and is set to increase as carriers further retrench operations, Alphaliner predicts. On October 25, 2008, there were just 70 ships of 150,000 TEUs without work.
The jobless fleet includes nine vessels of between 7,500 TEUs and 10,000 TEUs capacity, 34 ships of 5,000 to 7,500 TEUs and 57 of 3,000 to 5,000 TEUs. The feeder sector remains the most vulnerable with 85 ships of 1,000 to 2,000 TEUs lying at anchor.
The rising number of unemployed vessels is reflected in the 15 per cent reduction in total capacity on offer on the three main east-west routes over the six months to Febuary 1, according to Alphaliner. Capacity has fallen from a weekly 916,000 TEUs to 780,000 TEUs.
The Far East-Europe trade has seen the deepest cuts, with capacity tumbling 21 per cent to 333,000 TEUs from 418,000 TEUs. The closure of several service loops in December and January alone removed 50,000 TEUs of weekly capacity, which is now down to its lowest level since May 2007.
Capacity on the Far East-North America trades has fallen nine per cent to 335,000 TEUs from 376,000 TEUs, and the Europe/Med-North America route is down 4.5 per cent to 116,000 TEUs from 121,500 TEUs.
In its latest quarterly Container Forecaster, Drewry Shipping Consultants warned that this year would be the toughest test yet for the global container shipping industry and further casualties among operators are a real possibility. The consulting firm said long-held industry rules have changed or become skewed because the downturn happened so dramatically that the existing supply-demand mechanics in all trades have faltered at the same time, leaving no bright spots for the industry.
Four container operators, including China's SYMS and SA Independent Liner Services of South Africa, failed in late 2008, Drewry said.
Although carriers have been reducing capacity through suspension of a number of high-profile east-west services, Drewry says the gap between supply and demand is still too big.
Drewry says for the short- to medium-term, carriers can at best only stabilise freight rates that, on the Asia- Europe trade, have recently fallen to unprofitable levels.
Drewry has revised its estimate for 2008 global container traffic growth to 152.8 million TEUs, up 7.2 per cent year-on-year, down from growth of 8.6 per cent in its September report.