DESPITE serious excess supply in the market, particularly on the Asia-Europe trade, carriers have announced a series of dramatic rate increases on that trade, beginning from next month.

The likelihood of them actually achieving these hikes, based on the history of the shipping industry, is slim to none—unless of course, the current oversupply situation were to change. And even then, it would take some serious convincing for shippers to pay almost double what they are paying now.

With these proposed increases in mind, one can’t help but wonder whether the lines will make a more concerted effort to idle more ships going forward to help justify the increases.

A recently published report by the Baltic and International Maritime Council (BIMCO), which looked at the growth in newly delivered tonnage versus layups in December last year, found that just 3.4 per cent of the entire global fleet, or 526,000 TEU, had been idled at the time...

The report concluded that it was far from adequate, stating that it equated to removing three months of newbuilding deliveries. In the second quarter alone last year, shipping lines took delivery of 477,440 TEU in new capacity.

Since the end of last year idling has increased, but is still very low with Alphaliner reporting a total of 676,000 TEU in layup midway through January.

Analysts are adamant that more is needed as deliveries continue to outpace idling.

Clarkson analyst, Guy Campbell, said 2012 would prove to be a "pretty grim year". He projected that freight demand would grow 5.5 per cent this year while capacity increases 12 per cent.

A recent report by Shanghai International Shipping Institute (SISI) said the global container shipping volume is predicted to reach 160 million TEU by the end of this year, still up six per cent year on year.