Global Container Shipping Fleet Expansion Surges Amid Strong Demand for New Ships
The global container shipping industry is witnessing a notable surge in fleet expansion, as revealed by recent data from BIMCO. Despite a brief slowdown in late 2023, the demand for new vessels remains robust, with ship orders in 2024 already surpassing the total for all of 2023.
Since the beginning of 2021, the total contracted capacity has reached 10.47 million TEU (Twenty-foot Equivalent Units). The 1.59 million TEU capacity contracted so far in 2024 marks the third-highest figure since 2008, exceeded only by the first seven months of 2021 and 2022, according to BIMCO.
Niels Rasmussen, Chief Shipping Analyst at BIMCO, noted, “When only six ships with a combined capacity of 4,746 TEU were contracted in the fourth quarter of 2023, it seemed like the shipbuilding boom that started in 2021 might have finally slowed down. However, the appetite for new vessels remains strong, with 2024 orders already outpacing the full-year total for 2023.”
This recent wave of contracts, combined with those from previous years, suggests a potential 44% increase in capacity compared to the fleet size at the start of 2021.
Record-Breaking Containership Capacity in 2024 Masked by Extended Voyages
The actual growth of the fleet will ultimately depend on ship recycling rates. Since 2021, only 150 ships, representing 0.24 million TEU, have been recycled, resulting in a 25% expansion of the fleet and an increase in the average age of container ships from 13.0 to 13.9 years.
With the current order book to fleet ratio standing at 22%, there is considerable potential for further fleet expansion. This growth has been advantageous during the recent Red Sea crisis, which has driven up demand for ships due to longer voyage times.
Looking forward, the fleet is projected to grow by at least 12% by the end of the decade, corresponding to an average annual growth rate of 2.4%. Rasmussen cautioned that while cargo volumes might increase at a similar pace, the industry could face significant oversupply if fleet growth exceeds expectations and the Red Sea crisis is resolved, reducing ship demand sharply.
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