New box vessel capacity due for delivery this year, amounting to a record 1.65 million TEUs and representing 9.6% of the total global fleet as of January, will be offset by the scrapping of 500,000 TEUs and 200,000 TEUs in delivery deferrals.
The surge in vessel scrappings and delivery postponements would cut 4.1% off the forecast 2014 capacity growth rate and bring it down to 5.5%. This would be the lowest annual increase since 1999.
Containership scrapping is expected to reach a new annual record spurred by the recent exodus of unwanted Panamax ships, which are expected to account for more than half of the capacity to be scrapped this year.
The report said that a record number of ships have already been sold for scrap in the last two months.
The disposal of unwanted ships, some as young as 17 years, will help reduce the idle containership fleet, which currently accounts for 4.5% of the total fleet.
Oversupply is expected to continue in the container shipping market this year, as the projected demand growth of 4.4% will still be insufficient to absorb the revised supply growth of 5.5%.
Demand rose by 3.7% in 2013 based on Alphaliner's estimates of container throughput growth globally, compared to containership capacity supply growth of 5.7%.
Significant idling rates are expected to persist for the majority of the year, especially for vessels below 5,000 TEUs.
The weak outlook is forecast to keep charter rates under pressure in 2014, with additional delivery deferrals anticipated as non-vessel operating owners would be keen to hold up deliveries of some ships due this year.
There are 80 ships totalling 302,000 TEUs slated for delivery in 2014 to non operating owners that are without known charter employment.
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