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Vessels Still Laid Up Raises Doubts Over Economic Recovery

Wednesday, 17th February 2010
As the global economic crisis began to unravel last year many shipping lines decided to lay vessels up and cancel routes in an attempt to lessen the impact. Rather than wasting fuel running vessels with too few containers on board tough decisions had to be made. It may seem to an outsider a relatively easy thing just to switch the engines off and wait until business picks up but this is not something undertaken lightly by the lines. These days modern engines and ships controlled almost completely by computers and electronic equipment means on occasion the cost to decommission and reactivate can outway any potential savings made on fuel unless for a prolonged period, with some lines opting for warm lay-up as opposed to cold lay-up. Another factor to consider is where to put them. Ports will not want vessels laying idle at quayside blocking laden ships from loading and unloading their containers full of goods destined for sale. The latest batch of post Panamax vessels are huge, some with a capacity of over 15000 containers , measuring over 390m in length and with drafts of over 15m there are limited options when it comes to laying them up. At present container ships can be seen laying idle in Scottish lochs, the Cornish Estuary and Scandinavian Fjords as well as more exotic storage locations such as Thailand. At present with reduced capacity on many routes as a result of lay-ups and re-deployments the lines have been able to increase their rates, by considerable amounts in some cases. This may be a necessity to keep them afloat and recoup some of the losses made last year, the pain however is being felt by exporters and importers also struggling in the current climate. The decision to reactivate vessels and increase capacity is something that will need careful consideration as over capacity will inevitably lead to an erosion of rates and have an adverse effect on a very fragile recovery in the container shipping industry.

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