When shipowners make very high profits, they order many new ships. Shipowners’ profits are wiped out when these new ships are delivered from the shipyards.

The container industry experienced two of its most profitable years in shipping history in 2021-2022. Ship owners have ordered more new container ships than ever before. Even now that freight rates are dropping, they are still increasing their orders.

“A huge number of new large container ships will set sail at a time of sluggish demand,” Alfaliner warned in a report on Tuesday.”The market will struggle to accommodate all these new vessels.”

Alphaliner shipping analyst Stefan Verberckmoes said she currently has 7.1 million 20ft containership orders. The previous high was her 6.6 million TEU in 2008. At this point, the tonnage of the order was 60% of the surface fleet’s capacity.

Alfaliner notes that its global fleet has more than doubled since then, so the current backlog (an absolute capacity record) accounts for “only” 30% of existing tonnage.

The majority of tonnage on order will be delivered the next two years: 2.34 million TEUs in 2023 and 2.83 million TEUs in 2024, compared to around 1.1 million TEUs in both 2021 and 2022, said Verberckmoes.

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Source: Alphaliner