Larger ships in Asia-Europe trades are causing overcapacity in smaller vessel markets, impacting transatlantic and Latin American routes.
The introduction of larger vessels into Asia-Europe and Asia-Mediterranean trades has resulted in smaller ships being cascaded into transatlantic and Latin America corridors, leading to structural overcapacity in these secondary lanes, reports New York's Journal of Commerce.
By 2026, over 1.7 million TEU of new tonnage is expected to enter the market, primarily in the 15,000-to-24,000-TEU range. However, the sub-5,000-TEU segment, which is crucial for feeder and intra-regional networks, is rapidly aging, according to Sea-Intelligence Maritime Analysis.
This displacement of tonnage has been driven by factors such as Red Sea diversions, drought conditions affecting the Panama Canal, and alliance reshuffling that occurred in early 2025. The deployment of new 24,000-TEU ships on Asia-North Europe routes has pushed 14,000 to 20,000-TEU vessels into Asia-Mediterranean services.
By mid-2025, new alliances stabilized operations, with the Mediterranean-North America East Coast absorbing 127,686 TEU and Asia-East Coast South America gaining 112,998 TEU. Analysts noted that Asia-ECSA became a preferred destination for mid-size tonnage.
Consultancy MDS Transmodal cautioned that a return to Red Sea transits could reveal imbalances, with an oversupply of large ships and a shortage of smaller ones. More than 60 percent of sub-5,000-TEU vessels are at least 25 years old, yet new orders for these ships remain scarce.
According to Alphaliner, there are 593 vessels in the sub-5,000-TEU category that are 25 years or older, representing 13 percent of the fleet. In response, carriers have started ordering smaller units, such as Bangkokmax and Chittagongmax classes, to rejuvenate the aging segments.
