ACCELERATED scrapping of older tonnage and revived chartering of smaller ships has reduced the fleet size of idle ships, which reached a record high recently, Alphaliner says.

As of November 14, there were 363 unemployed ships of more than 500 TEU with an aggregate capacity of 1.49 million TEU, equivalent to 7.4 per cent of the global fleet, according to the industry analyst.

This compares with a high of 397 vessels of 1.59 million TEU, an unemployment rate of 7.8 per cent, two weeks earlier, IHS Media reported.

The delivery of 50,000 TEU of container ships to breaker yards in the two weeks was responsible for half of the decline of 100,000 TEU in idle vessels, putting demolition on track to hit an annual record of 650,000 TEU, compared with the previous high of 441,570 TEU in 2013.

At the same time, fresh chartering also helped trim the number of idle ships, particularly in the 2,000- to 3,000-TEU sector, which has seen the number of jobless vessels drop from 54 to 31 within a month. However, the charter market remains depressed with rates at historic lows for most size sectors.

Although with 90 classic Panamaxes of 4,000 to 5,100 TEU currently idle, of which 85 are controlled by non-operating owners, it will be difficult to continue reducing unemployment, according to Alphaliner.

"Compared to the record high of 92 (idle) units one month ago, the numbers have declined only marginally, and a dozen more classic Panamaxes are expected to be redelivered before the new year."

"The high level of scrapping is another positive development as it tackles the market's principal problem of overcapacity," Alphaliner said. "Continued scrapping will help, but for now, the overall outlook remains grim, with still too many vessels chasing too little business."