The number of unemployed container ships is now at an all-time high, due to the COVID-19 outbreak and the delay in scrubber installations at Chinese shipyards.
French shipping consultancy Alphaliner estimated that as of mid-February 2020, over 2 million TEU of capacity is out of service, exceeding the previous high of 1.59 million TEU when Hanjin Shipping entered court protection in September 2016. Prior to Hanjin Shipping’s collapse, idle boxship capacity peaked at 1.52 million TEU during the 2009 global financial crisis.
As a proportion of the total fleet, current idle capacity stands at 8.8%, compared with 11.7% in 2009, because many mega container ships have been built in the last decade.
Among the largest liner operators’ off-service ships, MSC Mediterranean Shipping Company has 33 vessels, Maersk Line has 15 vessels, COSCO Shipping Lines and Evergreen Line each have seven vessels. In particular, the 19,438TEU MSC Erica, which is on finance lease from Bank of Communications Financial Leasing, appears to have been anchored around China’s Tianjin port since 2 September 2019.
The COVID-19 outbreak coincided with a traditional lull amid the Lunar New Year holidays, resulting in liner operators blanking sailings. In the last three weeks, Asia-Europe and trans-Pacific capacities have been cut by 30% to 60%.
Service reductions are expected until end-March, as Chinese factories have been slow to resume output. Chinese shipyards also delayed work resumption, delaying scrubber installations consequently.
Alphaliner estimates that 111 ships with total capacity of 1.02 million TEU, are scheduled for scrubber installations.