Monday, November 3, 2008

What to do with excess ships

APL has confirmed they are laying up vessels. Actually taking them out of service and parking them.

The downturn in shipping has been fast. Only a little over a month ago one of the execs at APL was saying the lines needed to reverse the current market downturn (ha).

From the Sept. 25th blog "Ocean Shipping Downturn.. duh"

"A senior executive of APL has called on individual container lines to take decisive action to reverse the current market downturn.

Dan Ryan, APL’s Greater China president, speaking at the second Containerization and Liner Shipping China conference in Tianjin, said that a negative scenario of financial market turmoil, low consumer confidence as well as rising inflation and commodity prices, compounded by historically high fuel prices, requires lines’ urgent attention.

Suggested solutions included carriers moderating growth aspirations, returning excess tonnage to the charter market, rationalizing and even suspending some services, and having stronger resolve to pass along bunker costs to customers.

“If we fail to take action, the industry could see a more significant downturn than we have seen in many years,” he said."


I have never worked for a carrier which actually laid up vessels. Sometimes we would dry dock them early. Normally if a trade got really bad we would try to start another service, or increase frequency in an existing service.

Looks like MOL has decided to take their excess tonnage and start an Asia / East Coast South America service.

The move follows the termination of the carrier's existing joint service on the route, operated with Singapore's Pacific International Lines.

The company said it will deploy five 3,000-TEU and six 4,250-TEU vessels on the new weekly service.

"By replacing some of current 3,000-TEU class vessels with larger and faster ships, MOL will provide stable cargo capacity and higher schedule integrity to meet customer demand in this growing market," the carrier stated.



Well, the problem with that is this market probably isn't really growing, with Brazil and Argentina facing the same problems as the rest of the world.

But, it's probably a better solution for MOL than just parking their ships.

I can't really think of too many trade lanes where it would be a good idea to put in ships.

Maybe Africa.

But you would probably need ships with onboard cranes to service a lot of those ports, and those ships are fairly rare.

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