Thursday, February 12, 2009

Idled Ships Used for Empty Box Storage

Idled Ships Used for Empty Box Storage
(American Shipper – Eric Johnson)

It appears liner carriers are trying to make use of all the containerships idled by poor global demand by using them as floating container storage yards.

“Over the course of the last two months, several large units sitting at Far East anchorages were spotted with deck-loads of empty boxes,” maritime news service AXS-Alphaliner reported Monday. “Some carriers figured that is was cheaper to pay a handling charge once and have their empties loaded onto their ships, rather than paying the daily per-TEU storage fees charged by terminal and container depot operators (used when the carrier's own depots are full).

“State-of-the-art containerships have thus become mere storage hulls, anchored in roads in the vicinity of Singapore, at Hong Kong’s anchorages or in the Hangzhou Bay. Empties storage at sea allows carriers to save significant amounts of money, since storage fees – though individually rather modest – add up over time and with an ever-growing inventory of unwanted empties.”

Last week, Ben Hackett, a consultant with IHS Global Insight mentioned the phenomenon in an interview with American Shipper. “Laid up ships are being used to store empty containers as these build up at both ends of the trade,” he said.

The use of idled vessels for empty container storage is both an innovative solution to an ongoing problem, but also a sign of how low the market has sunk, and how little faith carriers seem to have in any sort of quick rebound.

Commentary: It sounds like the party's over?

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