The ocean shipping industry has been through quite a whipsaw over the past two and a half years, as the severe downturn in cargo volumes that reached depression levels in 2009 was accompanied in many cases by new ships ordered years before continuing to be delivered. Many carriers were said to be operating ships at or below variable costs to run them in 2009.

Rates have improved substantially since those days, from the carrirers view at least, and we seem to be in a period of reasonable supply-demand balance, with trends favoring  carriers or shippers, depending on whom you ask.

The chart below, from ocean shipping data service and research company Alphaliner, shows the dramatic change in the market just the past year, as idled capacity is dramatically down, while active capacity is corresondingly way up.

Source: Alphaliner

Alphaliner says that idled fleet has dropped by 78% from 1.51 million TEU in Jan 2010 to 0.33 million TEU currently.

Even though demand and load factors have fallen in recent months, Alphaliner says there has been relatively low fleet idling, as carriers were reluctant to withdraw capacity and give up market share. That sounds like good news for ocean shippers to us.

Alphaliner says average utilization levels have dropped to between 80-85% in December on the main linehaul routes from the Far East to Europe and North America

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