About us

The CEO of a shipping company told the National Broadcasting Corporation's Consumer News and Business Channel (CNBC): "Overcapacity has led to a lower charter rate in the shipping industry than its operating costs, and has made hundreds of ships Ships are vacant, and Trump’s trade protection policy may make things worse."

According to Alphaliner's data, there are currently only 88 Panamax vessels with a capacity of 4000-5100 TEU on the Panama Canal, and in June 2016 this figure was 221 vessels.

Panamax vessels can carry approximately 5,000 containers or 52,500 tons of cargo and are used to transport cargo across the Panama Canal.

At the same time, the vacancy rate of Panamax vessels is still high. There are currently about 68 ships vacant, down from 98 in October last year, but the drop in vacant numbers is mostly due to the dismantling of vacant ships.

Zvi Schreiber, CEO and founder of logistics technologyFreightos, believes that the problems faced by Panamax ships are not surprising.

He told CNBC by email: "Overcapacity and disappointing global trade have led to the bankruptcy of Hanjin and promoted the acquisition of Hamburg South America, pushing the shipping industry to the brink. Now these problems have also made the Panamanian shipping industry very popular. Strike."

"This has not even taken into account the possibility that President Trump’s new trade policy will further reduce the volume of trade through Panama."

According to the ship chartering index published by the Hamburg Ship Brokers Association, due to excess capacity, the charter rate is already below $5,000 per day and is currently around $4,264.

Alphaliner warned that at least 100 Panamax ships would have to be scrapped in order to bring the charter rates back to balance.

“Up to 100 ships need to be scrapped before the fleet can recover, especially from ultra-low charter rates. The current subopex (operating cost) level has not restored the industry’s demand for ships.” Alphaliner wrote in his weekly report.

“Demand still largely does not reduce the excess of ships across the Panama route.”

Panamanian ship owners can try to sell the ship to other operators or operate on other routes, but according to data from the shipping data provider VesselValue, among the 4,828 ships in operation, there are 2008 container ships that can only sell scrap prices. .

“In our system, the market value of these ships is only scrap value or lower, so no one tries to sell in the second-hand market, they can sell directly to the dismantling plant.” Toby Yeabsley, head of VesselValue, told CNBC via email.

Source: Search Network