Ocean market update

While they may have ended 2019 with rising rates and a buoyant spot market, largely due to blanked sailings, the global container shipping lines will need to control capacity in 2020 better than they have in the past, particularly with the International Maritime Organisation (IMO) low-sulphur fuel rules contributing to higher operating costs.

In January 2020, the active global container fleet has been reduced by1.41 Mteu, with 922,000 teu are out of service for scrubber retrofits, with another 130,000 teu of capacity waiting for retrofit yard slots.

The inactive fleet is expected to reach a new record of >1.6 Mteu in February due to retrofitting of scrubbers and an unprecedented number of blanked sailings for the post-Chinese New Year holidays.

The active fleet is expected to resume its growth with new ship deliveries and ships returning from retrofits over the course of this year, growing >5% in the second half of the year.

MSC and Maersk have the largest numbers of ships cur- rently undergoing retrofit, while HMM, CMA CGM and Evergreen will have the most new ship deliveries this year.

Scrubbers take off

Despite an initial lack of enthusiasm to embrace scrubbers due to the high installation costs involved, several carriers ramped up scrub- ber retrofit programs after doing their maths.

With the HFO/VLSFO spread currently reaching $300 at Singapore ($690 for HFO against $385 for VLSFO), the scrubber-fitted ships today enjoy a great advantage.

The scrubber retrofits are launched mostly at the initiative of some carriers and concern mostly large ships.

Scrubber makers provide compact scrubbers for 1,000-1,500 teu ships that are less cumbersome to install than on large, powerful ships and take half the time to install.

CMA CGM show the (green) way

The worldā€™s fourth-largest container shipping line CMA CGM has been pursuing a long-term strategy of emission control for over a decade. Reducing pollution levels from their fleet by 10% in 2017 alone.

Most recently, it embraced a new generation of marine fuel, LNG, to lessen its vesselsā€™ environmental impact, ordering nine new container ships of 22,000 TEUs in 2017, powered by the super-chilled natural gas.

This initiative earned the company the ā€˜Most Accomplished Ship Ownerā€™ award at the Maritime2020 Asia Summit in 2018.

CMA CGM is expected to deploy all nine of their new LNG powered 23,112 teu ships on the flagship ā€˜FAL1ā€™ service (Asia – North Europe) starting from June.