Unprecedented Growth in Container Ship Fleet Capacity: A 15-Year High

The container ship fleet has experienced a significant expansion, with capacity increasing by 1.6 million Twenty-Foot Equivalent Units (TEUs) since the beginning of the year. Compared to the previous year, capacity has surged by 11%, reaching a remarkable 29.5 million TEUs, marking the fastest fleet growth in 15 years.

According to Niels Rasmussen, chief shipping analyst at BIMCO, the delivery of new ships set a new record in the first half of 2024, with 264 ships boasting a combined capacity of 1.6 million TEUs being delivered from shipyards. This figure is two-thirds higher than the first half of the previous year when the last record was set. Rasmussen noted that while a new benchmark has not been established, the high demand for ships has resulted in low levels of ship recycling.

Strong cargo volume growth and the rerouting of ships via the Cape of Good Hope have also contributed to the recycling of only 36 ships, with a combined capacity of 51,000 TEUs. Despite these records, shipowners continue to place orders for new vessels. Year-to-date, 63 ships with a combined capacity of 0.4 million TEUs have been ordered, and the order book-to-fleet ratio remains high at 19%.

BIMCO reports that the order book already includes orders scheduled for delivery in 2028, with an average of 1.5 million TEUs slated for delivery each year between 2025 and 2027. Among the segments, ships with capacities ranging from 12,000 to 17,000 TEUs have seen the fastest growth, now comprising 22% of the container fleet. This segment's capacity grew by 25% year over year, accounting for nearly 50% of the overall fleet's growth.

The 12,000-17,000 TEU segment has been a key driver of growth in 2022 and 2023, and it is expected to continue dominating expansion in the coming years, making up more than 50% of the capacity on order. In contrast, ships larger than 17,000 TEUs, which dominated growth from 2015 to 2021, now represent only 17% of the capacity in the order book. Shipowners are shifting focus from larger vessels, as they are primarily operational in ports across Asia and Europe, and the 212 ships already in service adequately cover these trade lanes.

Rasmussen anticipates that the container fleet's capacity will exceed 30 million TEUs for the first time by the end of the third quarter and reach 30.5 million by the close of 2024. By the end of 2027, the current order book is expected to add another 4.3 million TEUs. However, as cargo volume growth may not keep pace with this expansion, Rasmussen predicts an increase in ship recycling to moderate overall fleet growth. Additionally, if ships can eventually return to routes through the Red Sea and the Suez Canal, demand for ships may decrease.

This rapid expansion highlights the dynamic nature of the shipping industry and underscores the importance of strategic planning to balance fleet growth with market demand. As the industry continues to evolve, stakeholders must remain vigilant to navigate the challenges and opportunities presented by this unprecedented growth.

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