The orderbook of new container ships — most of which are slated to be delivered between this year and 2027 — stands at more than 900 vessels, and those will have the equivalent of about a quarter of the existing carrying capacity.
A surge will pose a challenge from shipyards in China and South Korea, to the corporate marketeers who will have to come up with names for all those newly christened launches. In short: There’s too much container supply coming to meet the demand, threatening another spell of depressed ocean freight rates hangs in the balance if the shipping lines don’t take steps soon to reel in their capacity.
It’s not only spot container rates that are reflecting a supply-demand balance that’s shifted away from the shortages present just a year ago. The Xeneta Shipping Index for January showed a record-large drop in long-term rates — a month-over-month decline of 13.3%.
Heading into contract negotiating season, that’s welcome news for the owners of cargo and others who’ve felt the sting of inflation stemming from soaring freight rates.