Ocean Carriers Plan to Double Vessel Scrapping 

This year, ocean carriers and ship-owners are preparing to scrap container ships totaling more than 200,000TEUs (twenty foot equivalent unit). Thus far 69 ships totaling 124,000 TEUs have been scrapped this year, compared to the 85,000 TEUs for all of 2011. This increase is attributed to low earnings and a weak outlook for older, less efficient vessels.  The average age of scrapped container ships has dropped to 26 years compared with 28 years in the past.

Scrapping these older ships will not result in a decrease in the total number of TEU slots available though. Already, new ships have already added 621,000 TEUs. This will create less than full vessels for the steamship lines and raise their cost per TEU.  As larger ships that are able to carry more volume, the steamship lines will need to enter into large vessel share agreements in order to secure assistance in filling those vessels. Undoubtedly, steamship lines will continue to compete for more market share by attempting to reducing rates.