The Ocean Capacity Outlook: Shedding Light on a Complex Picture
The outlook for ocean container capacity has rarely been this complex. Beginning in 2020 carriers went on a furious ordering binge, driving the orderbook as a percentage of the existing fleet from 10 percent to 30 percent in two years’ time. The container shipping orderbook was just shy of 7 million TEU at the beginning of October; 2.6 million TEU of those new ships will be delivered in 2023 and 2.8 million TEU in 2024, according to S&P Global. At the same time, with volumes weakening and spot rates collapsing from their 2021 peak on the trans-Pacific and Asia-Europe, carriers likely will slow or cancel some orders. Drewry, for example, estimates the effective net increase in container shipping capacity in 2023 will be 11.3 percent, with demand growing at just 1.9 pecent. One capacity-absorbing measure that may help carriers manage excess supply is the International Maritime Organization’s 2023 environmental regulations that aim to reduce shipping’s carbon impact with penalties for less-efficient container ships. However, Jan Tiedemann, senior analyst at Alphaliner, said the actual impact of IMO 2023 was “still a mystery” and the industry was in a wait-and-see mode. This session will explore the outlook in depth.