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Trade
in the container industry must grow
25 per cent this year and a further
10 per cent in 2003 to maintain the
supply and demand balance as it was
in December 2000.
This
is the view of Bill Porritt, a
consultant from the UK, who has
calculated the level of scrapping
necessary to take place over the
next three years in order for the
industry to maintain the equilibrium
between supply and demand as at the
end of 2000.
An
alternative would be the massive
growth in trade, 'but I haven't
calculated the probability of that
[25 per cent growth] happening,'
says Porritt.
Shipping
lines would need to scrap 600,000
TEUs of post-panamax tonnage this
year in order to maintain the
supply/demand balance as it was in
December 2000, he said.
In
a worst case scenario this shocking
figure would include all post-panamax
ships delivered before 2000 and 18
of those delivered during 2000 says
Porritt. This makes up 123 ships.
“Even
if there was the collective will to
scrap at this level this is not
going to happen,” says Porritt.
The
demolition yards could not handle
this volume of work, but maybe some
rapid newbuilding cancellations
would help.
Using
the last full year for which figures
are available, 2000, Porritt made a
number of other assumptions, such as
in 2001 the global economy will
contract by 1 per cent, a
conservative estimate, he
says.
In
addition Porritt excludes ships
below 2,000 TEUs in his calculations
on the basis that 'one cannot
cascade surplus Panamax vessels in
an endless process - otherwise one
would have 4,000 TEUs ships
operating as feeders'.
Scrapping
only these older vessels would not
necessarily be useful either because
the older ships were significantly
smaller and a more substantive
scrapping programme would be needed,
taking into account size and trade
lanes.
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