Container ship fleet sees fastest growth in 15 years

Since the dawn of the year, the container ship fleet’s capacity has burgeoned by 1.6 million TEUs.

“Compared to a year ago, the capacity has surged by 11% to 29.5 million TEUs, marking the swiftest fleet expansion in 15 years,” remarked Niels Rasmussen, Chief Shipping Analyst at BIMCO.

In the first half of 2024, the delivery of new vessels reached unprecedented heights. A total of 264 ships, with a combined capacity of 1.6 million TEUs, were delivered from shipyards—two-thirds more than during the first half of the previous year when the prior record was set.

Although a new benchmark has not been established, the high demand for ships has kept ship recycling at a minimal level. Robust cargo volume growth and the rerouting of ships via the Cape of Good Hope have resulted in the recycling of only 36 ships with a combined capacity of 51,000 TEUs.

“Despite the record, shipowners have continued to place orders for new vessels. Year-to-date, a total of 63 ships with a combined capacity of 400,000 TEUs have been ordered, and the order book-to-fleet ratio remains high at 19%,” stated Rasmussen.

Currently, the order book includes deliveries scheduled for 2028, with an average of 1.5 million TEUs slated for delivery each year between 2025 and 2027.

The combined capacity of 12,000-17,000 TEU ships has experienced the most rapid growth. This segment now constitutes the largest within the container fleet, accounting for 22%. The segment’s capacity grew by 25% year-over-year, contributing nearly 50% to the overall fleet’s growth.

Indeed, the 12,000-17,000 TEU segment was also the primary driver of growth during 2022 and 2023. Furthermore, this segment will continue to dominate growth in the coming years, as it represents more than 50% of the capacity on order.

Ships larger than 17,000 TEUs dominated growth during 2015-2021 but now only comprise 17% of the capacity in the order book. Shipowners’ focus has shifted from these larger vessels, as they are operationally limited to ports in Asia and Europe, and the 212 ships already in service cover most of these trade lanes.

“The container fleet’s capacity is anticipated to exceed 30 million TEUs for the first time by the end of the third quarter and reach the 30.5 million TEU mark by the end of 2024. By the end of 2027, the current order book will add another 4.3 million TEUs. As cargo volume growth is unlikely to match this expansion, we expect an increase in ship recycling to temper overall fleet growth. Additionally, if ships can eventually return to the Red Sea and the Suez Canal, the demand for ships will decline,” added Rasmussen.