The June opening of the new locks on the Panama Canal has displaced at least 120 panamax containerships, with another 30 to 40 expected to be made redundant before year's end, according to Alphaliner.
The upshot is that more containerships in the 4,000 to 5,300-teu range are in lay-up and many of those would likely need to be scrapped in order to right the market balance, the industry researcher added.
It estimates 128 panamax ships are now in use for container services that transit the Canal, compared to 252 units that were employed prior to the opening of the wider locks. Those ships have largely been replaced by the wider beam, neo-panamax ships in the 6,700 to 10,000-teu range.
Some 34 of those ships are now being used for trans-Panama routes. More of those ships will join the fleet as services from Europe-Mediterranean to the west coasts of North and South America are upgraded.
"The exodus is set to continue, with a further 30 to 40 classic panamaxes to be removed from the trade over the coming months," Alphaliner said.
Clarksons data shows Coscocs, Maersk, Seaspan, MSC and Rickmers Group as the top five owners of panamax vessels in that size range.
Given the move to neo-panamax services, the unemployed panamax fleet sits at around 96, with 30 of those at long-term lay-up in Asia. In light of the large idled fleet, over 100 panamaxes needing to go to breakers in order to re-balance supply and demand, bringing the total pool of such ships down to less than 470 units, compared to 670 units as of four years ago.
"Only such a drastic reduction could elevate rates from their current all-time lows of $4,200-$4,500 per day," Alphaliner said.
