Because of the serious disruptions in international transport and travel as a result of Corona crisis the shipping companies temporarily put many ships out of service. Worldwide, 11.3 percent of the container fleet is currently unused, according to an internal report by the Association of German Shipowners (VDR) in Hamburg.
That means: 524 ships with a load capacity of 2.65 million standard containers (TEU) are not on the world’s oceans, but are in front of the ports in the roadstead, mostly in Asia. That is more than ever before. The crews who hope for orders or cannot go home often still live on board.
Last made headlines the case of the cruise ship “Mein Schiff 3” the shipping company TUI Cruises. Due to the travel restrictions, all other trips of the TUI fleet were canceled, the crews of the shipping company – almost 3000 employees – were moved to “Mein Schiff 3”. After a crew member tested positive for the corona virus, the ship was quarantined. The ship was moored in Cuxhaven for a month. In the meantime, it has left the port and is expected to anchor in the North Sea on a roadstead.
The branch service Alphaliner expects a further increase in the so-called trailers in June. The prospects for the industry are miserable. According to various forecasts, container transport is expected to decline by around ten percent this year; that would be the worst development in more than 40 years. Although the industry has had ten tough years since the 2008/09 financial crisis, it has grown rapidly over the course of many years in the course of globalization and has regularly posted double-digit growth. Now it looks as if there will still be an oversupply of shipping space for a long time and the return to the old growth path will take years.
The entire world fleet is out of order for cruise ships
The situation is similar in cruise shipping. The entire world fleet of around 400 ships is currently out of service. One end is not foreseen. In the United States, a “no-sail order” applies until July 24th. In Europe and Asia, it is not expected that the cruise ships will sail again this summer. Too many questions remain unanswered, for example the protection of older passengers, who make up a large part of the public. Thousands of employees are still on board there and cannot leave.
The overlying ships cost the shipping companies millions of dollars. And they also increase the risks for people and materials. This was pointed out by the Allianz subsidiary AGCS, which also acts as a global insurer shipping is one of their customers. Many seafarers have been on board for months. “If the crews are not relieved, physical and mental exhaustion can result,” said Volker Dierks from AGCS. Human error, with an estimated share of 75 to 96 percent, is the main cause of damage in the shipping industry.
The cost of restarting is considerable
In addition, the laid-up ships have to remain in good technical condition and this is not trivial. With a “warm” lay-up, the ships remain ready for operation with the crew, with a “cold-lay-up” most systems are switched off. To put them back into operation, extensive tests are required, sometimes even a stay in the shipyard. The cost is considerable. Other risks include delays in the maintenance and inspection of ships or an inadequate supply of resources such as lubricants and fuels.
The Allianz subsidiary is also concerned about a significant number of large cruise ships moored off the east coast of the United States. The start of the hurricane season could pose a risk to these ships if they could not be quickly removed from the danger zone.