Alphaliner Newsletter no 19 - 2013 full

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ALPHALINER Weekly 2013 Issue 19 Unit Scrapped The five C-10 units delivered to APL in 1988 were the largest containerships at that time. These vessels have a beam of 39.4 m, which were too wide to transit the Panama Canal which has a width limit of 32.3 m. The average age of scrapped units has fallen dramatically since the second half of 2012 and is now down to 22 years. An increasing number of vessels below 20 years are being scrapped, a previously unseen phenomenon. Many cash strapped owners do not find buyers for further trading, leading them to accept scrap offers. This also reflects the poor trading prospects with charter rates for ships of 3,000-5,000 teu expected to remain weak in the near term. The smaller ships fare better. Modern ships of 1,100 teu obtain currently higher rates than some panamaxes of 5,000 teu aged only of 10 years. 35 30 25 20 15 10 5 0 Jan-08 Units Scrapped ≤ 20 years Units Scrapped > 20 years Average Age of scrapped units 40 38 36 34 32 30 28 26 24 22 20 18 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Average Age longer receive an operating stipend to subsidize the higher costs of maintaining them under the US registry. The fifth C-10 unit, the Singapore flagged APL KENNEDY, will be retained for the time being. The ongoing exodus of both panamax and early over-panamax ships reflects the poor short term trading prospects for these vessels. Charter rates for modern 4,200 teu panamax units stand currently at about $9,200/day, which is well below the long term average rate of $24,000/day. Older panamaxes obtain even lower rates, down to $6,000 in extreme cases. $/day Charter rate for 4,000 teu Panamax containerships : 2000-2013 50,000 Despite the record scrapping levels, deletions still trail behind the delivery of new vessels. Based on Alphaliner’s records, new containership deliveries in the first four months of 2013 have reached 496,000 teu, outpacing the capacity scrapped by a ratio of 3-to-1. Total deliveries in 2013 could rival the previous record of 1.57 Mteu delivered in 2008, even after allowance for deferrals and slippage. Capacity in TEU 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 250,000 200,000 150,000 100,000 50,000 0 -50,000 0 Containership deliveries vs deletions and net capacity increase by month : 2008-2013 2008 Jan ALPHALINER Page 2 © Copyright Alphaliner 1999-2013 Jul TEU Scrapped TEU delivered Net Increase 2009 Jan 12 year average = $24,000/day Jul 2010 Jan Jul 2011 Jan Jul 2012 Jan ALPHALINER Jul 2013 Jan
ALPHALINER Weekly 2013 Issue 19 Diana Containerships, the USlisted owners of the MAERSK MALACCA and MAERSK MER- LION, is expected to book a loss of over $13M each for the early disposal of the two vessels for demolition. The two ships were acquired in June 2011 for $24M each, and were chartered back to Maersk for two years at a daily gross rate of $21,450. They had a carrying value of $23.9M at the end of 2012 on Diana’s books. Older panamax ships are increasingly being displaced by larger ships of 7,000-9,000 teu on their traditional trades, including the FE-US East Coast routes where they are being replaced by larger ships that have switched to using the Suez Canal. Demand is expected to drop further in 2015 when the third set of locks in the Panama Canal is opened, which will allow ships of up to 13,000 teu to transit the canal. Age Profile of Panamax ships 3,000‐5,100 teu ≤ 5 years 6-10 years 11-15 years 16-20 years 21-25 years > 25 years 0 100 200 300 Units MAERSK MALACCA - A checkered history (data extracted from Alphaliner archives) MAERSK MALACCA, together with its sistership the MAERSK MERLION, was built in 1990 for the Denmark-based East Asiatic Company (EAC). Both ships are maxi-panamaxes built in Japan by Mitsui, based on EAC specifications. They were delivered to EAC in July and November 1990 as AROSIA and ALSIA, with an original advertised capacity of 4,026 teu and fitted with 486 reefer plugs. The high reefer capacity was partly aimed at the Australian reefer exports, as EAC also maintained at the time a Singapore-Australia feeder service with two high reefer capacity 'Strider' class 328 teu ships fitted with 158 reefer plugs. The AROSIA and ALSIA joined the Maersk Line fleet in 1993 after EAC’s Europe-Far East activities were acquired by A.P. Møller (APM), parent company of the Maersk Line, in April 1993. At the time, EAC was a leading carrier on the Europe-Far East route, with a wholly-owned service run with nine ships of 3,000-4,000 teu. Created in Copenhagen in 1897 to serve the Scandinavia-Far East trades, with historical roots in Thailand, EAC used to serve the trade with tweendeckers. It launched its first Europe-FE full container service in 1972 as a partner in the newly formed ScanDutch consortium, set up together with Wilh. Wilhelmsen (Norway), Broströms (Sweden) and Nedlloyd (Netherlands). ScanDutch started operations with a full set of 2,500-3,000 teu ships, which corresponded to the intake of the maxi-panamaxes at the time (maxi-panamaxes are defined by the maximum length allowed to transit the Panama locks). All these pioneering ships were scrapped by 2002. The Europe-Far East 'ScanDutch' service ran initially in the eastbound direction only, via the Cape of Good Hope and Panama. The group only started to use the Suez route in both directions when the Suez Canal re-opened in 1975 (the Canal was closed in 1967 during the Six Day War). After the dissolution of ScanDutch in 1991, EAC teamed up with Ben Line (a Scottish carrier who was a member of the Trio consortium with Hapag- Lloyd, MOL, NYK and OCL) and in early 1993, EAC bought the Europe-Far East trade interests of Ben Line, Wilh. Wilhelmsen and Broströms, all finally coming under Maersk’s control. The AROSIA and ALSIA became then the MAERSK MARSTAL and MAERSK MUNKEBO following APM's purchase of EAC, with a revised nominal capacity advertised as 4,281 teu (through a boosted deck cargo count). They remained initially on the Europe-Far East route but were soon dislodged by larger ships, including the first 7,400 teu ships in 1996 (MAERSK REGINA class). Then, they plied various routes and were also transferred in September 2003 to the Singapore branch of A.P. Møller under the new names of MAERSK MERLION and MAERSK MALACCA under the Singapore flag. Of note, the MAERSK MERLION was sublet to MISC Bhd as MISC MERLION from February 2007 to March 2009 while the MAERSK MALACCA was sublet to MSC as MSC MALACCA from July 2008 to May 2009. Both ships were sold in April 2011 by A.P. Møller Singapore to Diana Containerships Inc., the US-based listed vehicle of Greek owner Diana Shipping, with a charter back of two years to Maersk Line without changing name. Their nominal capacity was then revised to 4,714 teu due to a remeasurement of deck cargo (without any change in the capacity of 3,046 teu at 14 tons). The MAERSK MALACCA has ended her employment in early May on the Maersk-CMA CGM Med-USEC joint service (West Med/Amerigo), which is to be closed and replaced by new alternatives. She has been sold for demolition for $10.3 M, with delivery due in early June. The MAERSK MERLION is also expected to be scrapped after ending her current employment this week on Maersk's FE-US East Coast TP-7 service via Panama, which is to be closed and replaced by a new TP-7 service using the Suez route. Page 3 © Copyright Alphaliner 1999-2013
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Alphaliner Newsletter no 19 - 2013 full

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