Freight price war may reappear
Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, focusing on markets such as Europe, the United States, Canada, Australia, and Southeast Asia. It is more of a cargo owner than a cargo owner~
Recently, shipping market research organization Clarksons released data showing that as of early November this year, the size of the global container fleet has historically exceeded the 7,000-ship mark. In the past 37 months, the number of fleets has increased by 1,000 ships, with an increase of 16.67% in the past three years, setting a new record for fleet expansion speed.
The analysis pointed out that this rapid growth is closely related to the shipbuilding boom after the epidemic from 2021 to 2022. Danish maritime consulting agency Sea-Intelligence issued a warning, saying that the market may face fierce competition in freight rates similar to 2016. Industry insiders generally believe that to maintain a healthy market, shipowners urgently need to accelerate the scrapping of old ships and rationally control new ship orders.
According to analysis by Linerlytica, an Asian container consulting company, in order to achieve a balance between supply and demand, the container shipping market will need to dismantle approximately 4.5 million TEUs in the next four years. However, statistics from shipbroker Braemar show that as of the end of August this year, the actual dismantling volume only involved about 12 ships, with a total shipping capacity of less than 8,500 TEUs, which is far from the expected target.
In terms of new shipbuilding, global new container ship orders exceeded 10 million TEUs in early September this year, which is approximately equal to the total existing shipping capacity of the five Evergreen Shipping Lines. Industry executives have called for new ship construction to focus on replacing old ships and meeting environmental protection and emission reduction requirements, rather than blindly expanding shipping capacity.
Clarkson further counted that the current total number of container ships in the world has reached 7,007, with a total transport capacity of 32.7 million TEUs. Since 2024, 936 new orders for container ships have been signed, and the shipbuilding market has become active again. If this trend continues, the global container fleet will reach 8,000 ships in the next three years. Currently, global orders on hand are still as high as 1,109 ships, of which 991 are scheduled to be delivered before the end of 2028.
Sea-Intelligence analysis pointed out that the global container shipping industry is facing "structural excess capacity", which is expected to reach its peak in 2027, and the degree of excess may be equivalent to that of the 2016 freight war period. Looking back on 2016, excess shipping capacity led to widespread losses in the industry and even led to the bankruptcy of South Korea's Hanjin Shipping.
The agency set a number of premises in its forecast: assuming that the Red Sea route returns to normal in mid-2026, a large amount of previously occupied shipping capacity will be released; it is expected that the dismantling of old fleets with ships over 20 years old will accelerate from 2026; it also pointed out that if the Red Sea crisis continues, although overcapacity may be delayed in the short term, it cannot reverse the long-term trend. In addition, changes in U.S. trade policy may suppress demand, and if new ship orders continue to increase, it will further exacerbate oversupply.
Industry executives admitted frankly that there is a consensus in the industry on how to solve excess shipping capacity. The key lies in whether unified actions can be formed to effectively speed up the elimination of old ships and curb disorderly shipbuilding. If most companies fail to take decisive measures, the market adjustment period will be prolonged, and some companies may face severe operating crises.
