Fleets are expected to shift focus to ultralarge vessels
According to Alphaliner, as of the end of September, there were 316 ultralarge ships that were 10,000 TEU and above which amounted to 4,214,000 TEU, and they accounted for 6.1% of the worldwide container fleet in the number of ships and 21.6% in vessel capacity. As of the end of September, there were 209 newly ordered ultralarge ships that were minimum 10,000 TEU, which totaled 3,146,000 TEU, and they accounted for 42.1% in the number and 74% in vessel capacity of the world’s newly ordered ships.
The fact that the capacity for ultralarge ships that are at least 10,000 TEU takes up 21.6% of the total global vessel capacity while the newly ordered such ships take up 74% of the total worldwide orders, shows that the global container ship market is taking turn toward a predominant fleet of ultralarge ships.
Major trade routes will see a pronounced increase in ultralarge vessels
Alphaliner forecast that the capacity for ultralarge vessels which are minimum 10,000 TEU would be 3,345,000 TEU (33% up) in 2014, 4,470,000 TEU (29.7% up) in 2015, 5,344,000 TEU (19.6% up) in 2016, and 6,364,000 TEU (19.1% up) in 2017. Meantime, it forecast that the global container vessel fleet would register an increase of 6.3% in 2014, 9.1% in 2015, 5.4% in 2016, and 4.6% in 2017, thus projecting a very steep rise in ultralarge vessels that are minimum 10,000 TEU.
As the information provider forecast that those ultralarge vessels that are minimum 18,000 TEU would increase by 276.7% in 2014, 137.5% in 2015, 38.2% in 2016, and 55.6% in 2017, we expect a greatly increased supply to major trade lane where ultralarge vessels flock.
As of September 2015, there were 31 ultralarge vessels that were 18,000 TEU and above and 72 ultralarge ships were newly ordered, thus totaling over 100 ships in combination. It is expected that 35 vessels will be delivered in 2015, 13 ships in 2016, 25 ships in 2017, and 30 ships in 2018 and beyond.
<source: Clarkson, Alphaliner>
On the other hand, the capacity for vessels that are 12,000 TEU and above will climax at 810,000 TEU in 2015 and then will register 500,000 TEU in 2016 and 600,000 TEU in 2017. The average size of delivered vessels will be 16,542 TEU in 2015, 16,181 TEU in 2016, and 18,171 TEU in 2017, which suggests that the average size will continue to increase for newly constructed vessels to be deployed on major routes.
If cascading is taken into account, growth of vessel tonnage is even greater
It should be noted that the growth of vessel tonnage we have surveyed so far does not take into consideration the cascading for different sea routes. When new ultralarge vessels are assigned to major trade routes, smaller vessels previously assigned to those routes are transferred to North-South routes or regional routes. So, we expect an oversupply of vessels not only on East-West routes, but also on regional routes such as North-South routes and East-Asian routes.
By 2019, the world will have up to 103 ultralarge vessels that are minimum 18,000 TEU, and their first assignment will be on European routes. In that case, 10,000 to 12,000 TEU vessels will probably be moved to North American routes. (With the completion of Panama Canal expansion scheduled for April 2016, we expect to see full-swing cascading from Europe to North America.)
Name of the game is the supply of vessels to European routes
In the end, cascading will proceed in the order of Europe → North America → North-South routes → Regional routes, which will aggravate the overall oversupply for the global container ship market. So, instead of simply focusing on the growth of supply for different vessel sizes, we should pay attention to the contribution to the entire world market from an increase in ultralarge vessels assigned to European routes, which constitute the top-tier market.