Low Bunker Prices No Blessing for Box Carriers

BIMCO says containerships have lost up to 16 percent of their value in the past year.

Lower bunker prices are no benefit to an industry in which the demand side is growing at sluggish levels compared to the supply side jumping by a massive 8.1 percent in 2015, BIMCO says in its latest analysis of container shipping.

The organisation says that, while the low costs are welcome to companies struggling to earn a profit, "some may have forgotten that slow-steaming originally was a way to deploy more ships without increasing capacity on the strings," and that speeds have increased even in the tramp shipping segments.

Data from Ship & Bunker shows there has been a dramatic slide in bunker prices since the collapse of oil prices in late 2014, with IFO380 in Rotterdam having fallen as low as $109 per metric tonne this month.

BIMCO notes that containerships have lost 6-16 percent of their value over the past year, which also saw only 193,156 twenty-foot equivalent units (TEU) taken out of the active fleet; it suggests that it would take all ships built before 1994 to be broken up "before we could set a new record beating the 444,000 TEU from 2013."

BIMCO calls the 208 new ships with a combined transport capacity of 1.67 million TEU entering the market in 2015 "The highest supply side capacity expansion ever" and states with some relief that only 850,000 TEU of new capacity will be added this year.

"Yet, it will be a year where all fleet growth will happen in the size-segments larger than 8,000 TEU, just as it has been the case every year since 2012," BIMCO notes.

"The only solace is that the work done by owners and investors managed to postpone the original agreed delivery dates."

BIMCO says of the container shipping market imbalance, "Like it or not, the container shipping fleet can cater for a much higher transport requirement than it does today, without growing at all for a few years."

Earlier this month, BIMCO warned shipping it should "brace itself" for another challenging year as hopes for an industry recovery fade.