Ship Rex

Some spinnage from the CEO of Seaspan: “Freight rates are increasing like crazy right now, and there’s positive sentiment. When freight rates are good, charter rates always come up.”

Here’s the truth from the horse’s mouth, however: “The amount of idled capacity will probably expand to the equivalent of 1.1 million boxes by the end of 2012 from 595,000 at the start of the year, according to Alphaliner, a Paris-based industry consultant. Operators won’t renew leases for some ships when they expire, said Fotis Giannakoulis.”- Bloomberg Businessweek

Exim India describes the industry’s self-imposed dilemma: “Large containerships flood market –

“A deluge of enormous containerships has recently flooded the market as ships held back at yards during the downturn are being delivered, adding capacity in an already overloaded scenario.

– “China Shipping Container Lines (CSCL) has taken delivery of the 14,074 CSCL Uranus, the seventh ship in a series of eight ‘neo-over-Panamaxes’ ordered in August 2007 …

– “Alphaliner also reported that UASC has taken delivery of the Al Ula and Tayma, the fourth and fifth vessels in a series of nine 13,100-TEU (A13 class ships). The ships were ordered at Samsung Heavy Industries in June 2008 …

– “Seaspan Corporation has received the Cosco Excellence, fifth of eight neo-Panamax VLCSs of 13,092-TEU ordered in August 2007 from Hyundi Heavy Industries with the backing of a 12-year charter by Cosco Container Lines … Delivery of the last four units in this series was deferred by eight to 15 months in the aftermath of the ongoing financial crisis …

– “Hyundai Merchant Marine (HMM) has taken charge of the Hyundai Tenacity, the second of the five ships of 13,092-TEU ordered in September 2007 from Hyundai Samho by Greek owner Danaos Shipping with the backing of 12-year charters by HMM. Delivery of the five units was, however, deferred by 9 to 12 months in the aftermath of the financial crisis …” –

Prior to the unanticipated “ongoing financial crisis”, shipping magnates, like the above-mentioned CEO, were concerned only with “the fanning of corporate feathers.” Their complacency and lack of vigilance inevitably brought insurmountable problems to the industry, and because someone in the group got the bright idea that “slow-steaming” was the way to bail out of the mess – and wouldn’t you know it – they all followed suit. Monkey see, monkey do. What do you suppose these geniuses would do if and when one of those super post-Panamax vessels suffers the fate of the MSC Napoli (4,688-TEU)? According to Andrew Chamberlain, of Holman, Fenwick & Willan, the salvage industry and a multitude of public authorities could barely cope with the Napoli disaster, and will be sorely tested when a post-Panamax goes the way of the ill-fated Napoli.

Maritime insurers won’t be too happy, either.