A. While you are reading the text, draw a chart illustrating the text.
Deliveries to Increase Despite Falling Orderbook[47]
The cellular ship orderbook has fallen to its lowest level during the past 18 months, according to Alphaliner figures. As at 1 April 2009, the orderbook stood at 1,045 ships for 5.8M TEU, representing 46% of the existing fleet, against a peak at 64% in November 2007, writes the source.
Despite the falling orderbook, the containership delivery schedule is forecast to increase in the next three quarters with 1.4M TEU due for delivery between April and December 2009. Total deliveries are expected to reach 1.7 M TEU for 2009 after adding the 311,000 TEU of new ships have that were delivered in the first quarter of the year. 76 cellular ships have been delivered so far this year, an unexpectedly low figure as some deliveries have slipped to the second quarter. A few large ships – although apparently completed – will be handed over several weeks later than planned.
Carriers are in no hurry to receive vessels at the moment, unlike the situation a year ago. It is not clear which orders are delayed through negotiation or are delayed because the yard is asked to correct minor faults experienced during tests and sea trials, in order to delay the delivery date and final payment.
The average annual growth during the next three years is expected to reach 13% per annum (before adjustments for scrapping), a smaller growth than earlier anticipated due to order determents and cancellation or suspension of orders. Nonetheless, with the current idle fleet measured by Alphaliner at 11.3% as at 1 April 2009, there is still significant surplus capacity that would need to be absorbed over the next three years.
The cellular fleet stood at 12.36 m TEU as at end 2008. Even with projected scrapping of 300,000 TEU/year for the next three years, the fleet is forecast to grow by 10.7% to reach 13.7 M TEU by the end of 2009. A further increase of 11.2% is due in 2010, before dropping to 8.5% in 2011. Since January, some 80,000 TEU of cellular tonnage have been scrapped or are committed for scrap in the next few weeks.
Deliveries will peak in 2010 when 1.8 M TEU is scheduled for delivery. Delivery schedules will remain fairly steady at 1.6 M TEU in 2011 before dropping to 0.8 M TEU in 2012.
The high delivery figures are largely the result of the massive ordering spree that peaked in 2007 when 3.6 M TEU of new orders were placed. A further 1 M TEU were placed in the first three quarters of 2008 before ordering came to a halt.
There have been no new orders placed for containerships since September 2008, marking the first time that ordering has completely stopped for two consecutive quarters since containership orders were first recorded in 1965. (Between 1956 and 1965, almost all cellular ships that joined liner services were conversions from existing cargo liners.)
Meanwhile, several existing orders have been cancelled or at least work was suspended at the yards due to lack of funds to finance their construction, while several series of ships have been deferred. Most of the orders recently cancelled or suspended due to lack of funds fall in the size range below 4,000 TEU, for which the orderbook represents only 13.5% of the existing fleet, against 70% for ships over 4,000 TEU.
There were reports of fresh order cancellations including a recent confirmation from China Shipbuilding Corp. (CSBC – Taiwan) that Zim has cancelled its order for six 1,700 TEU vessels. The ships belong to the ‘CSBC 1700’ design (1,713 TEU). They were ordered in July-September 2007 and were planned for delivery between October 2010 and July 2011.
It is also suspected that some carriers simply receive the ship at the planned date, but indicate a delivery date coinciding with the first service assignment. In such a case, an ‘idle’ status cannot be ascertained, keeping the ship de facto outside the idle fleet. A few ships seem effectively to be idle at the yard while completed – possibly laid up, or not handed over to their owners as well.
b. Define the following terms in English:
| 1. fleet | 2. carrier |
| 3. forecast | 4. suspend |
c. In the text find the words that mean the same as the following words:
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d. Match words to make collocations:
| 1. delivery | a. capacity |
| 2. final | b. fleet |
| 3. annual | c. date |
| 4. surplus | d. growth |
| 5. delivery | e. schedule |
| 6. idle | f. assignment |
| 7. service | g. payment |
e. Complete the table with correct word forms:
| Verb | Noun | Adjective |
| 1. | negotiation | |
| 2. suspend | ||
| 3. | cancellation |
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