The container ship order book keeps smashing record after record. In this week’s “Shipping Number of the Week” from BIMCO, Niels Rasmussen, Chief Shipping Analyst, states the order book reached 8.3 million TEU, up from the previous record of 7.8 million TEU in early 2023.
As 4.4 million TEU were contracted during 2024, the second highest ever, the order book grew despite deliveries hitting a new record high of 2.9 million TEU.
‘Making up 92 per cent of the order book capacity, ships 8000 TEU or larger dominate the order book. The largest segment, 12,000 to 17,000 TEU, makes up 46 per cent of the order book capacity,’ says Rasmussen.
Also read: ‘Container ship deliveries hit record of 2.5m TEU’
72 per cent built at Chinese shipyards
Shipyards in China have benefitted the most from the last four years’ contracting boom and currently hold 72 per cent of the order book’s 8.3 million TEU, while South Korean and Japanese shipyards hold 22 per cent and five per cent respectively.
Liner operators control 79 per cent of the order book capacity, significantly higher than the 61 per cent they control of the fleet capacity. Having already increased from 56 per cent at the beginning of 2019, liner operators’ share of fleet capacity is therefore set to continue growing in the coming years.
Also read: Container ship contracting spree exceeds 10 million TEU
Most ships delivered before 2030, while little scrapping
Though five ships have already been contracted for delivery in 2030, 99 per cent of the order book will be delivered during 2025-2029. According to the current delivery schedule, 0.7 million TEU will be delivered in 2029 while an average of 1.9 million TEU will be delivered during 2025-2028, peaking at 2.2 million TEU in 2027.
As recycling of ships during the past four years has been limited to 166 ships and 256,000 TEU, the average age of the fleet has increased 1.4 years since the beginning of 2020. Consequently, the number of ships twenty years old or older has risen, and they now make up 3.4 million TEU equal to eleven per cent of the fleet.
Also read: BIMCO: Demand shocks slash ship recycling
‘Average annual fleet growth could end higher than three per cent’
If all ships twenty years old or older are recycled during the next five years, the fleet will grow to 35.8 million TEU by the end of 2029, assuming no more ships are contracted for delivery before 2030. That is equal to sixteen per cent growth or an average annual growth of three per cent.
The segments smaller than 8000 TEU would see an average annual contraction of four per cent while the segments 8000 TEU or larger would grow on average seven per cent per year.
‘It would require 680,000 TEU per year to recycle all ships twenty years old or older during the next five years (the current annual record is 657,000 TEU), but actual recycling is likely to end lower. As long as ships cannot fully return to the Red Sea, recycling will likely continue to be low and at the same time the smaller ship segments tend to be recycled later than average. Therefore, average annual fleet growth during the next five years could end higher than three per cent,’ says Rasmussen.
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