In this week’s “Shipping Number of the Week” from BIMCO, Chief Shipping Analysis, Niels Rasmussen, looks at the global container fleet capacity. This is on track to reach a new high of 34 million TEU, fuelled by a high level of new deliveries and sluggish ship recycling activity.
‘When the world’s shipyards deliver just a few more container ships, the global fleet capacity will for the first time reach 34 million TEU. At that time, the fleet will have grown by 10 million TEU – or 42 per cent – in just 5.5 years,’ says Rasmussen.
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Record deliveries, low recycling activity
At the beginning of September, global container fleet capacity was just 8000 TEU below the 34 million TEU mark. The milestone will therefore be reached after only a few of the 46 ships (totalling 286,000 TEU) scheduled for September delivery enter into service.
The addition of 10 million TEU in just 5.5 years is also a record. In comparison, when 10 million TEU were added to increase fleet capacity from 14 million to 24 million TEU, it took slightly more than 10.5 years.
‘The growth we have seen reflects a combination of record-high new ship deliveries and remarkably low ship recycling activity. Less than 300,000 TEU have been recycled over the last five and a half years. The last time recycling activity was this low during the same time frame was between early 2004 and mid-2009 when the fleet was only one-third of its current size,’ says Rasmussen.
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New composition and ownership structure
The additional 10 million TEU have changed not only the fleet’s size but also its composition.
Ships larger than 12,000 TEU have contributed two-thirds of the 10 million TEU added since early 2021. As a result, the largest ships’ share of fleet capacity has risen from thirty to forty per cent while the average container ship size has increased by fourteen per cent.
Due to the low rate of recycling, the share of older ships has increased quite considerably. Nearly 2000 ships contributing more than 5 million TEU of capacity are now twenty years old or older. Within the next five years, these ships will have reached or exceeded the historical average recycling age of 25 years and therefore represent the natural recycling potential for the coming years.
The fleet’s ownership structure has also changed significantly over the past 5.5 years. Liner operators account for 85 per cent of the added 10 million TEU and now control 65 per cent of fleet capacity, up from 57 per cent in early 2021.
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44 million TU within five years?
‘Depending on recycling activity, the fleet could add another 10 million TEU and reach 44 million TEU within five years. The order book already includes more than 14 million TEU scheduled for delivery by the end of 2030. Even if every ship currently aged twenty years or more is recycled by then, supply growth will remain high, particularly if normal Suez Canal routings resume and release the capacity now absorbed by diversions around the Cape of Good Hope,’ says Rasmussen.
