According to reporter Greg Miller, an unprecedented new container ship will soon be put into use. The delivery rate will really accelerate in the next month, and it will soar higher in the second quarter, and continue to rise in the second half of the year, even higher in 2024, and remain strong in 2025.
Alphaliner said in a new report on Tuesday: “The huge orders are like the sword of Damocles hanging over the market. A large number of new ships will be delivered in the coming months, which will inevitably lead to the return of overcapacity.”
“From the middle of March, this change will be obvious,” Alphaliner analyst Stefan Verbeckmoes told American Shipper, adding: “This wave of new shipbuilding came at the time of shrinking demand.”
Maritime Strategies International (MSI) estimates that the delivery volume in the second quarter of 2023 will reach 717900 20-foot TEUs, an increase of 62% over the previous quarter, and the delivery volume in the third quarter of 2023 will increase to 764800 TEUs.

Ship spare parts

Delivery of mainline vessels per carrier
According to Alphaliner’s data, as of February 1, the total order volume was 7.69 million TEUs, slightly less than 30% of the capacity of the water fleet.
Among them, 2.48 million TEUs (32%) will be delivered this year, 2.95 million TEUs (38%) will be delivered next year, and 2.26 million TEUs (30%) will be delivered later.
In Tuesday’s report, Alphaliner analyzed the delivery of new ships that the first 11 carriers will deploy in the trunk line. These figures are particularly important for importers in the United States and Europe served by trunk ships.
Statistics show that 89 Shinkansen vessels will be delivered in the remaining time of 2023, 130 vessels will be delivered next year, 96 vessels will be delivered in 2025, and 315 vessels will be delivered in the next three years. (Including new ships for non-main line trade – namely small ships, intra-Asian ships, regional ships – Alphaliner data shows that these 11 carriers have ordered 499 new ships in total.)
The Mediterranean Shipping Company (MSC) is the world’s largest maritime carrier, and it is receiving the largest trunk capacity by 2025. It has 92 such ships in preparation, 33 of which will be delivered in the rest of this year.
CMA CGM has the second largest trunk ship order, with 38 ships, and the largest orders will be delivered next year. COSCO Group (including OOCL) ranked third with 32. On February 16, OOCL held the naming ceremony of its latest cargo ship “Oriental Spain” 24188 TEU at NACKS Shipyard in China.
Delivery of mainline vessels by size
Alphaliner also studied the size categories of these new ships and divided them into three categories: “giant”, with a capacity of 23000-24000 TEUs, which will be deployed in Asia-Europe trade; “Neopanamaxes”, a vessel with a capacity of 13000-15000 TEU, can pass through the Panama Canal; And other trunk ships with a capacity of more than 7000 TEUs. The delivery of new Panamax and other trunk ships will affect the US maritime market.
Neopanamaxes is by far the largest category, accounting for 60% of the total number of trunk new ships delivered by 2025. Megamaxes accounted for 23%, and other trunk lines accounted for 17%.
MSC focuses on the more flexible new Panamax ships. According to the data of Alphaliner, by 2025, they will account for 62% of its trunk ship deliveries. Neopanamaxes accounted for 58% of CMA CGM trunk ship orders.
As far as delivery time is concerned, the largest wave of Megamax arrival this year (accounting for 60% of the total) is coming, which has raised concerns about the imminent overcapacity in Asia and Europe.
Alphaliner warned that “at a time of weak demand,” a large number of Megamax new shipbuilding “will join the Asia-Europe trade.
During the whole period of 2023-25, the delivery volume of new Panamax and other trunk ships will be large, but this is especially true next year (accounting for 44% of the total delivery volume), which means that the pressure on the trans-Pacific transport capacity will increase in 2024.

Ship service

Impact on operator strategy
Matt Cox, CEO of Trans-Pacific Airlines Matson (New York Stock Exchange stock code: MATX), resolved the order dilemma at the quarterly conference call on Tuesday.
Cox said, “What I think will happen and should happen is that the international maritime carriers operating through their global alliance will eventually adjust their fleet size across the Pacific and around the world.”
“There is a large order book. These ships will be delivered. Some of them will be delayed. We will also see the advanced level of scrapping. For the ships chartered – about 50% of the global fleet – many will be returned to the ship owner after the end of the charter period.
“You will see the combination of adjustments [strategies] that will happen, and may even shelve the ship,” Cox added. He predicted that these strategies would be strengthened in the “next few months”.
Different views on order profligacy
The overwhelming consensus is that operators will face difficult years due to their ordering frenzy. However, there are different opinions on how bad it will be and whether the carrier’s ordering behavior is rational or irrational.
On the one hand, some people believe that the carrier has once again foolishly lifted a stone and smashed itself in the foot, succumbed to the classic boom and bust shipping cycle model, over-ordered and locked in the losses in the next few years – their ordering behavior is “crazy”
According to this view, the order capacity far exceeds the demand of the global market. As the supply of ships exceeds the demand for a long time, at least some carriers will compete for market share, resulting in a long-term downturn in freight rates, which will eventually erase most of the huge profits of carriers in the COVID era.
On the other hand, maritime carriers need new ships. Before COVID, when operators faced serious financial pressure, there would be an extreme shortage of orders for a long time. The global fleet is getting old. According to the data of VesselsValue, the average age of container ships in the world is 14.6 years.
Newly-built ships are more fuel efficient than ships of old tonnage, and fuel is one of the highest costs for carriers. New shipbuilding can also combine dual-fuel functions to enable operators to “face the future” environmental regulations.
Container shipping companies order new ships when the freight market reaches its peak, because they have enough financial resources to do so at that time. The balance sheets of shipping companies have never been stronger than today. This enables them to easily finance new shipbuilding to replace old ships and reduce future operating costs.
With the delivery of the new ship, the carrier will scrap the old ship they own and let the old chartered tonnage stop leasing. Compared with its own fleet, the proportion of chartered fleet in the carrier’s fleet is far higher than the new capacity ordered. According to Alphaliner data, the chartering tonnage of the top 11 carriers is 76% or 4.6 million TEUs higher than the total order tonnage of these carriers.
Many chartering terms will exceed the delivery date of new construction, which means that there will be temporary suspense, and the remaining chartering costs will erode some of the carrier profits earned during the boom.
But in the end, after a challenging transition period, operators will eventually have a new and fuel-efficient fleet, with the scale suitable for demand, and there will still be some popular windfalls on their balance sheets – or optimistic theory is that.