THE containership orderbook has surged to its highest level since 2009, fuelling concerns about potential overcapacity as vessels continue returning to the Suez route and teu-mile demand growth lags behind supply expansion.
“We all have to be cognisant that the orderbook does pose a significant challenge if there are significant changes in demand,” Randy Chen, vice-chairman of Taiwan’s Wan Hai Lines, told Lloyd’s List on the sidelines of an industry forum in Shanghai.
Bing Chen, chief executive of containership lessor Seaspan, said the absolute volume of orders was “certainly very high” and that shipping remained a cyclical industry.
“The only question is when the next downturn arrives. And if you are investing in newbuildings speculatively nowadays, I think it could be very risky.”
Seaspan, he added, does not do so. “Every dollar we invest, whether in new or secondhand ships, is backed by a long-term, back-to-back charter. We do not make any speculative investments.”
Orderbook at 46.5%
The comments come as Mediterranean Shipping Co ordered a further 20 vessels of 24,000 teu at Hengli Heavy Industry, taking the number of ships above 20,000 teu it has contracted at the Dalian yard to 62, according to Linerlytica.
HMM separately confirmed on October 20 an order for eight 13,000 teu LNG dual-fuel ships at HD Hyundai Heavy Industries and HD Hyundai Samho, worth about KRW2trn ($1.5bn), for delivery from 2029 and deployment on its Far East-India-Mediterranean service.
Together the orders lift the orderbook to 16.2m teu, or 46.5% of the existing fleet, Linerlytica said — a ratio not seen since the aftermath of the 2008 financial crisis, when a wall of newbuildings ordered at the peak of the market collided with collapsing demand.
Shipyards have responded by releasing more 2029 delivery slots in recent weeks, and buyers are “facing serious competition”, one shipbroker said.
“The total container orderbook has now surpassed a staggering 15m teu, yet the appetite remains high.”
Unprecedented variables
Both executives argued, however, that the old link between fleet growth and GDP no longer captures how much capacity the market can absorb.
Seaspan’s Chen said that unprecedented factors have complicated traditional supply-demand calculations.
“Port congestion, Houthi threats to Red Sea shipping, US-China port fees, decarbonisation — many factors have changed the equation,” he said. “Shipping has also become a national security consideration, so it’s no longer purely an economic calculation.”
Wan Hai’s Chen agreed that teu-mile demand had risen “tremendously” above the rate of economic growth over the past few days because of congestion, protectionist practices and other disruptions — “it just shows that there are always different near-term effects that could change the economics very quickly”.
Suez return adds pressure
Some of the support for vessel demand from disruptions appears to be loosening, however.
Much of the surplus tonnage delivered over the past two years has been absorbed by the diversion of services around the Cape of Good Hope, which lengthened voyages and soaked up capacity. That cushion is now deflating.
The number of containerships diverted from Suez to the Cape has fallen to 180, the lowest since January 2024 and roughly half the two-year average of 350, Linerlytica said.
Of the services it tracks, 30 of 52 westbound and 32 of 57 eastbound loops have already returned to the Suez route, with two more in each direction scheduled to switch back in November, despite continuing tensions in the Middle East Gulf.
Global teu-mile demand is already running below supply growth, the analyst added.
“If the industry continues to reinvest in its own capacity, there is always going to be a risk that supply will overwhelm demand. That’s absolutely a risk,” Chen from Wan Hai added. “Simply increasing risk does not necessarily lead to better returns, especially in a volatile environment.”
