Bloomberg News

Idled Container Ships Reach 18-Month High as Trade Growth Slows

December 16, 2011

Dec. 15 (Bloomberg) -- The number of container ships idled rose to the highest level in 18 months as the supply of vessels expanded and trade growth slowed, according to Paris-based shipping researcher Alphaliner.

Some 210 ships with a combined carrying capacity of 526,000 20-foot boxes were idled as of Dec. 5, Alphaliner said today in an e-mailed report. That’s the highest since May 2010 and will reach 600,000 boxes by the end of the year, according to the report.

Shipments to Europe from Asia rose 4.5 percent in the first 10 months of this year, while capacity expanded nearly twice as much, rising 8 percent, according to Woking, England-based Container Trade Statistics Ltd., which tracks shipment information. The U.S. will import 2.8 percent more containerized goods next year, down from a previous forecast of 4.7 percent, Newark, New Jersey-based Journal of Commerce/PIERS said Dec. 12, blaming a “stubbornly slow” economic recovery.

“This is a symptom of a container shipping market suffering from a glut of vessels and slowing trade growth,” Nikolaj Kamedula, an analyst with SEB Enskilda in Copenhagen, said by phone today. “Container lines are facing a tough year of single-digit demand growth.”

The global fleet of container ships expanded 17 percent to a near-record 4,774 vessels in the past four years, according to Redhill, England-based shipping data provider IHS Fairplay.

Costs to transport 20-foot containers to Europe from China fell 33 percent to $490 a box this quarter, according to data from Clarkson Securities Ltd., a unit of the world’s largest shipbroker. Shipments to the U.S., measured in 40-foot units, are down 8.8 percent to $1,419 over the same period.

West Coast Imports

Containerized imports from Asia to the U.S. West Coast will advance 2.7 percent next year, compared with an earlier estimate of 5.9 percent, Journal of Commerce/PIERS said. That’s the world’s largest inter-regional trade lane for shipping manufactured goods such as furniture, televisions and car parts, according to Clarkson.

The U.S. economy, the world’s largest, will expand 1.8 percent next year, compared with 1.5 percent in 2011, the Washington-based International Monetary Fund estimates. That compares with projected global growth of 4 percent.

London-based shipbroker Clarkson cut its estimate for this year’s growth in trade on the Asia-to-U.S. route to 1.5 percent from 6.1 percent in November. The global trade prediction was cut to 8.3 percent from 9 percent.

“The number of container ships idled is increasing due to an oversupply of ships and also a lack of demand,” Lars Heindorff, an analyst with Copenhagen-based ABG Sundal Collier ASA, said by phone today.

--With assistance from Michelle Wiese Bockmann in London. Editor: John Deane

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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