THE 1.59 million TEU capacity contracted so far in 2024 has reached the third highest level since 2008, exceeded only by the first seven months of 2021 and 2022, reports Fort Lauderdale's Maritime Executive.
'In combination with the 8.86 million TEU contracted in 2021-2023, the previous four-year contracting record of 8.31 million TEU (2004-2007) has already been surpassed by far,' according to the latest update from BIMCO.
Compared to the size of the fleet at the beginning of 2021, the capacity contracted since then will add 44 per cent new capacity but actual fleet growth will depend on how many ships are recycled, the update said.
'When only six ships with a capacity of 4,746 TEU were contracted in the fourth quarter of 2023, many might have thought that the container ship contracting spree that began in 2021 had cooled,' said BIMCO analyst Niels Rasmussen.
'However, the appetite for new ships remains high and year-to-date contracting already exceeds the 2023 full year total. That brings the total capacity contracted since the start of 2021 to 10.47 million TEU,' he said.
Since only 150 ships (240,000 TEU) have been recycled since 2021, the many new ships delivered have not been enough to keep the average age of the fleet in check.
The average age of containerships has increased from 13 years at the beginning of 2021 to 13.9 years today. 'Ship recycling activity has been very low since 2021, and the 3.88 million TEU contracted and delivered since then has - along with capacity contracted before 2021 - already contributed to a 25 per cent expansion of the fleet since January 2021,' Mr Rasmussen said.
Although freight rates and time charter rates suffered a setback during 2023 because market growth could not keep pace with fleet growth, the Red Sea crisis has lengthened voyages and increased demand for ships this year.
In fact, the fleet not grown substantially before the Red Sea crisis began, it could have developed into a major supply chain crisis. 'The fleet is expected to grow at least 12 per cent before the end of the decade, equal to an average annual growth rate of 2.4 per cent.
Although cargo volume growth might match that pace, we could see pronounced oversupply if fleet growth ends higher and the Red Sea crisis ends, lowering ship demand significantly,' he said.
SeaNews Turkey
'In combination with the 8.86 million TEU contracted in 2021-2023, the previous four-year contracting record of 8.31 million TEU (2004-2007) has already been surpassed by far,' according to the latest update from BIMCO.
Compared to the size of the fleet at the beginning of 2021, the capacity contracted since then will add 44 per cent new capacity but actual fleet growth will depend on how many ships are recycled, the update said.
'When only six ships with a capacity of 4,746 TEU were contracted in the fourth quarter of 2023, many might have thought that the container ship contracting spree that began in 2021 had cooled,' said BIMCO analyst Niels Rasmussen.
'However, the appetite for new ships remains high and year-to-date contracting already exceeds the 2023 full year total. That brings the total capacity contracted since the start of 2021 to 10.47 million TEU,' he said.
Since only 150 ships (240,000 TEU) have been recycled since 2021, the many new ships delivered have not been enough to keep the average age of the fleet in check.
The average age of containerships has increased from 13 years at the beginning of 2021 to 13.9 years today. 'Ship recycling activity has been very low since 2021, and the 3.88 million TEU contracted and delivered since then has - along with capacity contracted before 2021 - already contributed to a 25 per cent expansion of the fleet since January 2021,' Mr Rasmussen said.
Although freight rates and time charter rates suffered a setback during 2023 because market growth could not keep pace with fleet growth, the Red Sea crisis has lengthened voyages and increased demand for ships this year.
In fact, the fleet not grown substantially before the Red Sea crisis began, it could have developed into a major supply chain crisis. 'The fleet is expected to grow at least 12 per cent before the end of the decade, equal to an average annual growth rate of 2.4 per cent.
Although cargo volume growth might match that pace, we could see pronounced oversupply if fleet growth ends higher and the Red Sea crisis ends, lowering ship demand significantly,' he said.
SeaNews Turkey
