Alphaliner: Low Bunker Prices Prompt Increased Sailing Speeds, Detours as Idle Box Fleet Soars to "All-Time High"

Alphaliner's latest weekly report says that the idle container ship fleet reached a new record high of 1.57 million TEU at the beginning of March.

Alphaliner this week has reported that the idle container ship fleet reached a new record high of 1.57 million TEU at the beginning of March, beating the previous record of 1.52 million TEU at the end of 2009, while low bunker prices have prompted operators to increase average sailing speeds.

The idle fleet was said to also contain an "unprecedented" amount of Very Large Container Ships (VLCS) and Ultra Large Container Ships (ULCS), with an estimated 55 vessels of 7,500 to 19,000 TEU capacities currently unemployed.

The idle fleet could have been even larger if 140,000 TEU had not been sent for demolition in December.

In this respect, Alphaliner said the current low bunker price environment was working against carriers as it has "prompted shipping lines to increase average sailing speeds again, further worsening the vessel over-supply situation," as opposed to previous years where they had turned to slow steaming to save costs.

However, what low bunker prices have enabled carriers to do is divert away from either the Suez or Panama Canals (and their tolls) to the longer route by the Cape of Good Hope, with Alphaliner saying that at least 12 container liner services have done so.

As Ship & Bunker reported earlier this month, the low price of bunkers meant there was worthwhile savings from the detour despite the increased voyage distance, even when an increase in vessel speed was taken into account. 

Plus, Alphaliner said that "The Cape of Good Hope diversions currently help the market by absorbing just under 100,000 TEU of vessel capacity which would have become redundant, had all services continued their usual routings via the Suez or Panama Canal."

In January, an analysis by BIMCO said that lower bunker prices are no benefit to box carriers in 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.