Container fleet capacity boosted due to record ship deliveries

Bimco, the international shipping association has shared an update that the contracting of new ships has reduced since 2021 but is twice as high as during the 2010s. The number of orders contracted this year is around 1.3 million TEUs which has kept the order book high which is just 3000 TEUs short of the record 7.6m achieved in March 2023.

A spokesperson of Bimco said that the order booked is quite large and that delivery via ship exceeds the previous records. As per the estimation of the delivery dates, the delivery is expected from 2023, 2024 to 2025 respectively of 2.4m, 2.9m and 1.9m TEUs. It is also suggested that there will be an expected increase in the recycling of ships wherein more energy-efficient ships will be replaced with less efficient ones to reduce greenhouse gas emissions.

Even though the recycling of ships is on the list, the fleet is expected to grow by 4.5m TEUs between 2023 and 2025 which will be increasing the fleet capacity by around 18%. This upsurge comes at a time when present trade growth in many key regions is weakening and global economic growth prospects for the coming years are falling.

As per the Container Trades Statistics, total global container volumes during the first half of 2023 dropped 4.3% year-on-year (y-o-y) and ended only 0.2% higher than during the first half of 2019. The important regional trade lanes fell a combined 4.9% y-o-y but remained 3.1% higher than during the first half of 2019 and improved in the second quarter.

Highlighting the recent time charter and freight rate market weakness, headhaul and regional trade volumes have hiked by 5.3% compared to Q2 2019, while fleet capacity has increased by 17%.

Future supply growth may be affected by slow sailing speeds, but further fleet capacity growth of about 15% in the coming year underlines how supply-side growth will remain a challenge for shipowners and operators.