Capacity growth to reach 8.8% in 2011

Cellular containership capacity is expected to grow by an average annual rate
of 8.7% over the next two years, with 1.26 Mteu due to be added in 2011 and
1.33 Mteu in 2012, based on Alphaliner projections. These figures follow the
1.20 Mteu which have been added to the fleet in 2010. Although the fleet increases
over 2011-2012 will not reach the figures recorded in 2006-2008,
when an average of 1.37 Mteu 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% on average in the first
three quarters of 2010. However, the average growth at these ports has slowed
to 8% in the fourth quarter, with the trend towards slower growth likely to persist
into 2011.
The slowing of the demand in the fourth quarter has already started to hurt carriers’
load factors. Alphaliner estimates of vessel utilization levels on the Far
East-US and Far East-Europe routes dropped to only 80% in December, the lowest
levels recorded since May 2009. Attention must now be shifted to utilization
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.

Aphaliner