Business, Freight News, Sea

Containership Deliveries Set Record, BIMCO

[ May 23, 2024   //   ]

Container ship deliveries are continuing their blistering pace into 2024, BIMCO said, as deliveries have already topped 1 million TEUs of container ship capacity in the first four months of the year.
The pace is an 80 percent increase over the same period in 2023, when deliveries reached 2.3 million TEUS of capacity for the full year, 37 percent better than the former all-time high, the Danish international shipping association reported.
However, scrapping of vessels trails considerably with only 17 smaller ships retired for recycling, raising overcapacity concerns.
“Due to record deliveries the order book has declined,” said Niels Rasmussen, chief shipping analyst at BIMCO. “However, as 1.8 million TEUs have been contracted during 2023 and 2024, it has only declined by 1 million TEUs and now stands at 6.1 million TEUs, 21 percent of the current fleet size. As a result, the order book’s share of the fleet is more than twice the size than it was before the COVID pandemic and liner operators’ contracting spree began.”
The order book contains 2 million TEUs for delivery in 2024 and delivery volumes for the year is on target to exceed 3 million TEUs, 30 percent higher than last year’s record. In 2025, deliveries should end just below 2 million TEUs, the third highest deliveries in one year only exceeded in 2023 and 2024.
Deliveries are nonetheless still some way off the record when seen in relation to the size of the fleet. In 2024, BIMCO expects deliveries to reach 11 percent of fleet capacity at the beginning of the year. That was most recently beaten in 2008 when deliveries made up 14 percent of the fleet.
The record high ship deliveries were expected to create significant oversupply in the market, and while this did impact the market in 2023, it appears that deliveries this year instead contribute to keeping global container trade moving, according to BIMCO.
Due to the rerouting of ships via the Cape of Good Hope following attacks in the Red Sea by Houthis, about 10 percent more capacity is needed to manage global container trades. Capacity needed to manage any market growth should be added to those 10 percent.
“When ships start increasing sailings via the Red Sea and the Suez Canal, we will most likely see significant oversupply. Between 2019 and 2023, the fleet grew 21 percent while container volumes only grew 4 percent. Between 2023 and 2025, the fleet is expected to grow another 15 percent,” Rasmussen said.

Niels Rasmussen, Chief Shipping Analyst, BIMCO