Stats show need for regional fleet renewal

London-based shipbroker Braemar believes that 2021 could see a spate of ordering for vessels of around 3,500TEU as nearly 30% of these vessels in the global fleet will be over 20-years old.

According to Jonathan Roach of Braemar ACM’s research division, by January of next year the number of vessels in the regional vessel size, around the old panama sized vessels, up to 4,000TEU, totals 3,100 ships, with up to 900 reaching an age where operating companies will need to consider replacing the ships.

Roach emphasised that there has been very little ordering of the mid-sized container ships and that has left a gap in this category of ships. “We expect owners will need to order as demand for these vessels increases, and the price of second-hand vessels and newbuilding prices converge,” he added.

“With a two-year lead time from ordering to delivery if vessels are ordered next year they will be operational by 2023, by that time that fleet will be even older, with more 20-year old plus ships,” explained Roach.

The broker’s comments come as an order for five 3,500TEU vessels with an option for five more ships, from the Yiangzijiang shipyard in China for a total of around US$40 million/ship. The order was reportedly placed by a Japanese joint venture company with a long-term charter for the vessels already established with Maersk Line.

“Vessels such as these could be popular in the growing intra-Asia trades as many regional ports have shallow drafts, these ships have a wide beam and are comparatively short, taking up less quay space,” said Roach.

A shift in the trading patterns in Asia has seen China to US cargo volumes decline by 17%, but an increase of 26% and 38% in exports to the US from Vietnam and Cambodia respectively, according to US census trade figures.

Although Vietnam has a number of deepwater ports, many ports such as Chittagong in Bangladesh and some Indian ports are shallow.

Roach added that “There is a growing intra-Asia trade with high load factors, and the old Panamaxes are a little long, with the wider, 35m beam, and a shorter length, these ships will be easier to accommodate, they will be a more flexible trader.”