Container shipping market distorted by crisis in the Red Sea

Alphaliner’s latest report on the shipping market shows that the number of idled ships is at its lowest level in over 22 months, with just 84 ships currently not in use. The number of vessels in repair yards has also decreased, with 99 ships totaling 236,266 teu, a significant reduction from last year.

The Red Sea crisis has changed the dynamics of the industry, with a lot of extra tonnage needed and newbuildings being immediately introduced in East West loops. As a result, new tonnage delivered is heading straight into the Asia to Europe trades to help carriers maintain services on the European trades out of Asia.

To maintain services, some carriers have offered ad hoc sailings using smaller tonnage, while the 2M alliance has been successful in deploying newbuildings into its Asia to Europe services. However, the market is expected to face overcapacity once the Suez routing is safe again, with many ships becoming redundant.

The current situation remains fluid, with more capacity under construction for delivery in 2024 and 2025 than is needed for Cape diversions. The Red Sea crisis has also led to a low level of vessel scrapping, as long as the crisis looms.

Source .