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Cellular containership capacity is expected to grow by an average annual rate of 8.7 per cent over the next two years, with 1.26 million TEU due to be added in 2011 and 1.33 million TEU in 2012, based on Alphaliner projections.
These figures follow the 1.20 million TEU which have been added to the fleet in 2010.
Although the fleet increases over 2011-12 will not reach the figures recorded in 2006-2008,when an average of 1.37 million TEU per year were added, the level of capacity additions remains a key concern for the industry.
A large part of the new capacity added in 2010 was absorbed by the increased demand that was caused by the rapid economic recovery.
Throughput volumes at the world's five busiest container ports grew by 18 per cent on average in the first three quarters of 2010.
But average growth at these ports slowed to eight per cent in the fourth quarter, with the trend towards slower growth likely to persist into 2011.
Weakening demand in the fourth quarter has already started to hurt carriers' load factors.
Alphaliner estimates of vessel utilisation levels on the Far East-US and Far East-Europe routes dropped to 80 per cent in December, the lowest recorded since May 2009.
Attention must now be shifted to utilisation levels in the next two months, as these will determine the direction of freight rates after the Lunar New Year celebrations in the Far East.
The rate weakness observed since August last year could continue for the rest of 2011. This would hurt carrier profits, adding to the pressure from rising fuel costs and charter rates.
Bunker prices are currently at their highest levels since October 2008 and are 15 per cent higher than last year's average level.
Charter rates have also doubled from last year's lows for the smaller vessel classes while rates for ships above 4,000 TEU have tripled compared to 12 months ago.
More than half of the new capacity additions over the next two years will be of ships above 8,000 TEU.
These large ships are mostly slated for the Asia-Europe and Asia-US routes, creating overcapacity concerns which will, however, be mitigated through cascading of vessels of 6,000 - 8,000 TEU to secondary routes.
Cascading has already begun, with MSC leading the way with the introduction of 8,000-TEU vessels on South Africa routes and ships of up to 7,000 TEU on the Transatlantic, Europe-Indian subcontinent and Far East-South America routes.
New orders may still push up the 2012 delivery figures but open slots are limited at some smaller shipyards.
The deliveries scheduled for 2013 currently stand at 820,000 TEU but this figure is expected to rise as yards try to fill up their orderbooks.
Several carriers and non-operating owners are currently negotiating ships for delivery in 2013, with expectations that these orders could boost the 2013 deliveries by another 800,000 TEU.
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