Continued Expansion of the Container Ship Fleet Shows Sustained Growth.

The container shipping industry is witnessing a surge in fleet expansion, as indicated by recent data from BIMCO. Despite a slight slowdown at the end of 2023, there is strong demand for new ships, with contracts signed in 2024 surpassing the total for 2023. The total contracted capacity since the beginning of 2021 has reached 10.47 million TEU, with 1.59 million TEU contracted in 2024, the third highest value since 2008.

The appetite for new ships remains robust, as highlighted by Niels Rasmussen, Chief Shipping Analyst at BIMCO. The recent increase in contracts, combined with previous agreements, could potentially lead to a 44% rise in new capacity compared to the fleet size in 2021. However, actual fleet growth will be influenced by ship recycling rates, which have been relatively low since 2021, resulting in a fleet expansion and an age increase for container ships.

Looking ahead, the order book to fleet ratio indicates further fleet growth, with expectations of a 12% increase by the end of the decade and an average annual growth rate of 2.4%. However, Rasmussen warns that an oversupply could occur if fleet growth surpasses cargo volume growth and the crisis in the Red Sea subsides, leading to reduced demand for vessels.

Source