Record high empty cargo ships

By Robin Chan

THE number of empty container ships worldwide has climbed to a record high, according to a new report.
A total of 392 vessels are currently sitting idly in ports, up from 210 at the beginning of last month.

The unused cargo space is equivalent to about 1.1 million standard units (TEU) of empty containers, or 8.8 per cent of the total world capacity.

This figure surpasses the previous high of 5 per cent set in 1986, the year United States Lines went bankrupt.

The report from Lloyd's List in Britain said demand would have to grow at an average of 15 per cent over the next three years 'just to restore equilibrium' by early 2013.

A 10 per cent figure, however, was more realistic, pushing recovery to 2014.

Hobbled by a combination of an oversupply of ships and a dwindling demand for goods, the shipping industry is facing one of its most challenging times.

Shipping lines have responded by sharply cutting capacity to reduce costs and push freight rates back up.

APL, a unit of Neptune Orient Lines (NOL), said yesterday it would raise its rates on the Asia-Europe route by US$250 (S$382) per container from April1. That followed similar moves by other shipping lines,

Mr Detlev Kerber, APL's vice-president for the Asia-Europe trade, said: 'Freight rates in this trade have been falling drastically for more than a year...In many cases, not even variable transportation costs are covered by current freight rates.


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