The global fleet of containerships is about to hit a significant milestone, with its capacity expected to reach 34 million TEU. This growth has been impressive, increasing by 10 million TEU in just over five years, according to BIMCO.
As of early September, the fleet was only 8,000 TEU short of the 34 million TEU milestone. This means that only a few of the 46 containerships scheduled for delivery this month are needed to surpass this number.
Niels Rasmussen, the chief shipping analyst at BIMCO, noted, “When a few more container ships from shipyards are delivered, the global fleet capacity will reach 34 million TEU for the first time. This increase represents a growth of 10 million TEU — or 42% — in just five and a half years. The previous increase of 10 million TEU took more than ten and a half years to achieve, going from 14 million to 24 million TEU.”
BIMCO highlighted that this rapid growth is due to a mix of record deliveries of new ships and low levels of ship recycling. In the past five and a half years, less than 300,000 TEU of capacity has been scrapped, despite the fact that the fleet is about three times larger now than during the last comparable period of low recycling.
Additionally, this growth has led to a shift towards larger ships. Vessels over 12,000 TEU have made up about two-thirds of the 10 million TEU added since the start of 2021. Their share of the total fleet capacity has risen from 30% to 40%, and the average size of containerships has increased by 14%.
Liner operators have also gained more control over their fleets. According to BIMCO, carriers contributed 85% of the added capacity during this period and now control 65% of the global fleet, an increase from 57% in early 2021.
However, with limited scrapping, the industry now has a growing number of older vessels. Nearly 2,000 containerships, totaling over 5 million TEU, are at least 20 years old. In the next five years, many of these ships will reach or exceed the industry’s typical recycling age of about 25 years, resulting in a significant number of potential candidates for demolition.
How many ships actually get scrapped will be important as new ships continue to be delivered.
The current containership orderbook consists of more than 14 million TEU scheduled for delivery by the end of 2030. BIMCO estimates that the fleet could add another 10 million TEU in the next five years, pushing total capacity to around 44 million TEU.
Rasmussen stated, “Even if every ship older than 20 years is recycled by then, supply growth will still be significant.”
The supply situation may become more challenging if containerships return to their usual routes through the Suez Canal. The diversions around the Cape of Good Hope have taken up considerable vessel capacity by extending voyage times, helping to mitigate the effects of the industry’s large newbuilding program.
If ships go back to shorter routes through the Suez, this could release capacity back into the market at the same time that shipyards continue to deliver a historically high number of new vessels.