The shipping industry has seen a significant surge in new deliveries of container shipping capacity, with a record 1 million twenty-foot equivalent units (TEU) delivered in the first four months of 2024. This marks an 80% increase over the previous record set by BIMCO. The rapid expansion of the container ship fleet in the post-COVID-19 era is evident, with a 3.5% year-to-date growth following an 8.2% growth last year.
Despite the increase in deliveries, the container ship sector’s order backlog has declined to 6.1 million TEU, representing 21% of the current fleet size. BIMCO forecasts that full-year delivery volumes will exceed 3 million TEUs in 2024, a 30% increase over last year. However, the increase in fleet capacity poses a potential oversupply issue, especially if shipping routes in the Red Sea and Suez Canal become accessible again.
The rise in ship deliveries has helped sustain global container trade, as longer trips around the Cape of Good Hope are required due to Houthi attacks in the Red Sea. BIMCO warns that a return to normal routes could lead to a significant oversupply of shipping capacity. Despite the challenges, the Drewry world container index has risen by 16% this week and is significantly higher than last year as the industry prepares for the busy summer shipping season.
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