Megamax newbuilds idle as carriers try to ‘turn the tables’ with shippers

Giant newbuilds being forced to idle ahead of a maiden voyage for months on end is never a good sign, and is something that is now a reality for the container trades where fortunes have nosedived over the past 15 months.

Measuring 399.9 long, the giant 24,346 teu MSC Micol was meant to begin her maiden voyage next month from Shanghai to Europe having been delivered from China’s Yangzijiang Shipbuilding, part of a record 1.5m teu orderbook delivering to Mediterranean Shipping Co (MSC) in the coming couple of years.

Alphaliner now reports the ship will depart on January 4, part of MSC and alliance partner Maersk’s recently unveiled 29 blanked sailings on the main east-west trades, the latest in a slew of measures announced by global liners to try and halt the slump in rates amid a severe injection of new capacity hitting the markets through to 2026.

The MSC Micol is currently undergoing sea trials with its owner likely to now take official delivery of it at the start of January to claim a 2024 built date.

“Overcapacity keeps worsening, due to an uninterrupted injection of newbuilding capacities of all sizes,” Alphaliner warned in its latest weekly report, adding: “Carriers have been trying to address these issues by closing services, downsizing fleets, slow steaming and blank sailings but this is not enough.”

Analysts at rival container shipping consultancy Linerlytica argued this week that rates will come under increasing pressure through September, with transpacific carriers already withdrawing peak season surcharges even before the Golden Week holidays in October.

“Belated attempts to blanks sailings from the end of September will do little to address the imbalance in the absence of concrete service withdrawals,” Linerlytica experts suggested in their weekly newsletter.

Not everyone is so pessimistic however. Peter Sand, chief shipping analyst at freight rate platform Xeneta, argued today that the blanked sailing strategy has shown to be effective in propping up rates.

After a year of plunging ocean freight rates, carriers appear to have turned the tide on the key China to US west coast trade, driving up spot rates by 73% since the end of June, according to data from Xeneta.

“Capacity management is king when it comes to controlling rates, and faced with weak demand and a surplus of vessels it was clear to carriers that something had to be done,” Sand said. “What we’ve seen in response to that are some very bold, united moves from the industry that, it seems, are succeeding in turning the tables.”

Sand went on to suggest that carriers have managed to “outsmart” shippers in recent months.

Where most analysts agree is on the nature of this year’s disappointing peak season.
“Weakening demand would support the observation that this year’s short and relatively modest peak is behind us,” commented Judah Levine, head of research at box booking platform Freightos.


Mr Sam Chambers