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Drewry Maritime Research says further delays to newbuild deliveries are required to prevent the gap between supply and demand widening in 2015. More ULCV orders are only likely to extend how long carriers will have to wait for harmony.

Some 100,000 teu of new containerships scheduled for delivery in 2014 is estimated to have slipped into 2015. While this helped to narrow the gap between supply-demand last year it will only add to the supply pressure this year.

The delivery of the 19,000-teu CSCL Globe, the latest box ship to take claim the title of the world largest containership has tickled the interest of the mainstream media and highlights the current arms race among carriers for ever bigger, more fuel efficient ships.

The evolution of the biggest box ship crown has been staggeringly rapid with the 2005-holder the Gudrun Maersk now a veritable minnow at just 9,500 teu. In fact, the CSCL Globe will itself soon have to pass on its mantle as new ships for MSC and UASC, both scheduled for early-2015 deliveries, are expected to have larger stated capacities. This hyper-inflation is matched at the aggregate level with the container cellular fleet nearly quadrupling since the start of the century.

For individual carriers the rationale for ordering bigger, more technologically advanced and fuel efficient ships is entirely sound as it lowers their slot costs, but it does present the wider industry with a huge problem in how to absorb the extra capacity.

The appetite for new ULCVs (Ultra Large Container Vessels) is making it much harder for carriers to match supply with demand. Supply and demand grew broadly in parallel in the first-half of the latest decade but diverged quite dramatically following an ordering frenzy in 2007-08, later compounded by the global financial crisis that derailed demand.

Drewry's latest Container Forecaster report revealed that 2014 was another year of excess supply growth. By end 2014, the total global cellular fleet had nominal capacity of 18.1 million teu, up 6.0 percent on 2013. World container traffic lagged behind at 5.2 percent.

The gap would have been wider, but for an estimated 100,000 teu worth of scheduled newbuild capacity that did not arrive on time. Without this so-called "slippage" the global fleet would have grown by a further 0.6 points to 6.6 percent in 2014.

Slippage is not uncommon as shipowners and yards re-negotiate delivery terms, and the sum for 2014 was lower than seen in recent years. However, that tonnage still has to be delivered at some point and delays merely push the problem down the road. This year the problem is particularly acute as the overhang in 2014 deliveries will be in addition to the huge 1.85 million teu already due to be added to the fleet.

Scrapping of old ships along with further slippage of newbuilds into 2016 will lower the net addition to the fleet to around 1.35m teu, but this would still represent the largest spike in annual capacity since 2007. Moreover, Drewry still sees the global fleet growth exceeding demand at 7.2 percent versus 5.3 percent.

The industry has remained in a very long market trough since the index fell to 90 points in 2009, and there is very little light at the end of this tunnel, with our global Index figure not about to get close to the magic number of 100 until 2018 at the earliest.

- Drewry is a leading independent global maritime advisory and research organization.



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