An increase in deliveries of new ultra large container vessels (ULCV) coupled with low demand is putting downward pressure on freight rates. While 947,000 TEU of new build containership capacity has been delivered this year through early August, only 36,833 TEU of capacity has been demolished, and Q2 demolition being the lowest level in 10 years at just five ships or 9,608 TEU, according to Shipping. As a result, the shipping association has downgraded its demolition forecast from 250,000 TEU to 80,000 TEU for 2018. However, fleet growth should become more manageable in 2019, it said.
An increase in deliveries of new ultra large container vessels (ULCV) coupled with low demand is putting downward pressure on freight rates. While 947,000 TEU of new build containership capacity has been delivered this year through early August, only 36,833 TEU of capacity has been demolished, and Q2 demolition being the lowest level in 10 years at just five ships or 9,608 TEU, according to Bimco. As a result, the shipping association has downgraded its demolition forecast from 250,000 TEU to 80,000 TEU for 2018. However, fleet growth should become more manageable in 2019, it said.