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Container sector faces its worst capacity crisis ever

In the coming weeks, the inactive fleet of container ships could climb to more than 3 million teu. This marks the worst capacity crisis ever for the container sector, reports Alphaliner.

Photo: PR / Evergreen

Container shipping lines are voiding sailings on a large scale, and this could in the coming weeks push the inactive fleet to more than 3 million teu, reports analyst firm Alphaliner.

The most recent record was 2.46 million teu, in early March. In the second quarter alone, more than 250 planned sailings could be voided, as freight demand has plunged steeply.

There will however be significant involuntary idling for a large part of the carriers’ operated fleets, as up to 30 percent of total capacity is being removed from some of the most badly affected routes

Alphaliner

The corona crisis has shut down markets across the globe, and consumers are also staying away.

"The large scale sailing cancellations could push the inactive container ship fleet to over 3 Mteu in the coming weeks in the worst capacity crisis that the container shipping industry has ever seen," writes Alphaliner.

30 percent have disappeared

Several routes with usually large capacity will be fully canceled in the second quarter, including 2M's major AE-2/Swan service, where 12 ships of 23,000 teu sail between Asia and North Europe.

"No market segment will be spared, with capacity cuts announced across almost all key routes," writes the firm.

Bigger ships will be deployed on smaller routes, replacing the smaller ships here, while shipping companies will be forced to idle significant portions of their operated tonnage. And according to Alphaliner, this will impact all ship segments in the coming weeks.

Some of the idle ships will have scrubbers installed during their downtime, with ships corresponding to 1.02 million teu currently at yards to have this done.

"There will however be significant involuntary idling for a large part of the carriers’ operated fleets, as up to 30 percent of total capacity is being removed from some of the most badly affected routes," writes Alphaliner.

English Edit: Daniel Logan Berg-Munch

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