With the launching of the giant Explorer Class container ship CMA CGM Marco Polo last year and the planned launching of her two sister ships due for 2013, it would seem that the capacity for container shipping would be easily keeping pace with the demand but this may not really be the case. The bulk of containers are carried by mid-sized vessels equipped to handle between 2,500 and 3,000 teus each and it is this sector of the containerized shipping industry that has been the hardest hit by the economic recession of the past decade.

In recent years the oversupply of these small to mid-sized vessels has led to a great deal of volatility in shipping costs which has caused many of these smaller shipping companies to operate on very slim margins. At the same time the introduction of ships with larger capacities has contributed to widespread scrapping of the smaller ships which has in turn forced up demand for space on board the larger craft. This has pushed up the price which has discouraged many customers from employing the smaller shipping companies1.

It is in Asia that these statistics are having the greatest impact. Because the bulk of freight in the region is travelling between Asian countries on smaller ships they aren’t benefitting from the deployment of ships with a larger capacity and as the smaller ships are being scrapped the demand for space is beginning to outstrip the supply. This problem can only continue to be compounded by the expected growth of the Asian economy in the next few years, which will place even greater demands on the container ships in the region2.

Even though it seems as though shipping companies will continue to scrap smaller ships and reduce their speed to save fuel, causing a slight reduction in the overall capacity of container shipping worldwide, the introduction of many new container ships of different sizes into the intermodal networks is estimated to outpace the increase in demand for at least the coming year3. After that the outlook is less clear due to the wide range of estimates available for growth in the sector and uncertainty over the number of smaller container ships that are planned to be scrapped in the coming couple of years. While the new super sized Triple E Class container ships will significantly increase the freight capacity of the major sea lanes where they are being deployed, away from those busy highways of the sea the picture is developing in a completely different and challenging direction.

References:
1. https://theloadstar.co.uk/kg-demise-offers-a-glimmer-of-hope-for-container-shipping-overcapacity-crisis/
2. https://www.scmp.com/business/companies/article/1189508/asian-exports-fuel-orders-big-container-ships
3. https://www.freshplaza.com/news_detail.asp?id=106820