Container Ship Capacity Surges in 2024 – Oversupply Concerns

Record Deliveries Push Fleet Growth Despite Recycling

The global container ship industry is experiencing a boom in capacity, with 2023 deliveries shattering records and 2024 on track to follow suit. This growth, however, raises concerns about potential oversupply in the coming years.

  • 2023 Deliveries: A staggering 2.3 million TEU (twenty-foot equivalent unit) of container ship capacity entered service in 2023, surpassing the previous record by 37%.
  • 2024 on Pace for More Records: With over 1 million TEU delivered in the first four months alone (an 80% increase compared to the prior record), 2024 is poised to break another delivery record.
  • Fleet Expansion Outpaces Recycling: Ship recycling efforts haven’t kept pace with new deliveries, resulting in a net fleet increase of nearly 1 million TEU (3.5%) since the beginning of 2023. This adds to the already significant 8.2% growth from 2022.

Order Book Remains High Despite Deliveries

While record deliveries have shrunk the order book by 1 million TEU, it still sits at a substantial 6.1 million TEU, representing 21% of the current fleet size. This is more than double the pre-pandemic level and reflects the aggressive ordering activity by shipping companies.

Looking Ahead: Potential Oversupply on the Horizon

  • Deliveries to Peak in 2024: The order book indicates a peak delivery year in 2024, with an expected total exceeding 3 million TEU (30% higher than 2023’s record).
  • 2025 to See Continued High Deliveries: Deliveries are projected to remain strong in 2025, reaching nearly 2 million TEU, the third-highest annual total on record.
  • Delivery Ratio Compared to Fleet Size: Although deliveries are high, they represent a smaller portion of the total fleet capacity compared to historical peaks. In 2024, deliveries are expected to account for 11% of the year-beginning fleet size, lower than the record 14% reached in 2008.

Oversupply Mitigated by Rerouting and Growth Needs

  • Red Sea Rerouting Creates Short-Term Demand: The rerouting of ships around the Cape of Good Hope due to security concerns in the Red Sea has temporarily increased capacity needs by about 10%. This additional demand helps absorb some of the new ship deliveries.
  • Long-Term Oversupply Risk Remains: While rerouting offers a temporary solution, the significant fleet growth (21% between 2019 and 2023) compared to slower container volume growth (4%) raises long-term oversupply concerns. With an additional 15% fleet growth expected between 2023 and 2025, the industry may face challenges in the coming years.


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