Bangkok Shipowners and Agent Association

Bangkok Shipowners and Agents Association
To represent and promote the views and policies of the Association to the Thai Government and all other governmental official and non-governmental bodies which may be concerned with shipping.
Home News World Shipping News More box ship idling seen
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Friday, 03 February 2012 08:29
Fairplay 1/2/12

MORE BOX ships must be idled for rates to recover profitability, as slow steaming has reached its limit, a sector consultancy warned today.

The total capacity absorbed through additional slow steaming has increased slightly during the past six months, as bunker prices rose, but Alphaliner said the positive effects on overall fleet employment have been nullified.

The reason is that several long-haul loops that were already operated with extra-slow steaming were closed or suspended; such ships were operated just at 8-12 mph.

During most of 2011, capacity absorbed by such steaming oscillated between 650,000 and 730,000teu, based on Alphaliner estimates. A short peak at 800,000teu took place in February 2011, caused by lower cargo demand in the post-Lunar New Year, which is expected again this year.

Slow steaming is now firmly rooted and practiced on almost all long-haul routes, absorbing 750,000teu, or 4.9%, of the total box fleet.

Slow steaming is not applicable for such shortsea trades as the intra-Asia and intra-Europe markets because of the fast turnaround need on such routes.

Rising fuel prices have prompted carriers to stretch 25 long-haul loops by a week since September 2011, absorbing an estimated 150,000teu of excess capacity (including the new stretchings planned for February).

Some loops have been slowed without any rotation change, while one or two port calls were added for others, together with slower speed.

Analysts have estimated that at least 8% of the fleet must be idled for rates to return to profitability.