Tidal wave of new container ships: 2023-24 deliveries to break record
7.1 million TEUs on order vs. previous record of 6.6 million in 2008
Shipping adheres to a time-honored tradition: When shipowners make exceptionally high profits, they order a lot of new vessels. When those newbuilds are delivered by the yards, it kills shipowners’ profits.
Such boom-and-bust behavior has been de rigueur for over a century. As London shipbroker J.C. Gould, Angier & Co. wrote in 1894: “The philanthropy of the shipowners is evidently inexhaustible. The amount of tonnage on order guarantees a long continuance of low freight rates.”
The container industry has experienced the most profitable two years in shipping history in 2021-22. Right on cue, owners ordered more new container ships than ever before. Even now, as freight rates tumble, they’re still ordering more.
“A huge number of new large container ships are going to hit the water at a time of stagnating demand,” warned Alphaliner in a report on Tuesday. “The market could struggle to absorb all these new ships.”
The container-ship orderbook now stands at 7.1 million twenty-foot equivalent units, according to Alphaliner shipping analyst Stefan Verberckmoes. The previous peak was 6.6 million TEUs in 2008. At that point, tonnage on order totaled 60% of the capacity of the on-the-water fleet.
Since then, the global fleet has more than doubled, so the current orderbook — a record in absolute capacity terms — represents “only” 30% of existing tonnage, noted Alphaliner.