Container Shortage that has occurred in recent times has resulted in high freight rates. One solution to solve this problem is to build new ships to meet the high demand.
In a report released by BIMCO Chief Shipping Analyst Peter Sand, new container ship orders have broken records (measured in a capacity) in less than eight months. A total of 3.44 million TEUs were ordered in 2021 alone.
The shipowners, who have a lot of cash and are short on tonnage, have ordered a total of 619 container ships for future shipments. Of these, 381 have been ordered in 2021 alone.
“Today the container ship order book holds 5.3m TEU of shipping capacity which is scheduled to be added to the fleet from 2023 and onwards. Entering 2021, the order book stood just at 2.5m TEU. Since then, a record high 3.3m TEU has been ordered, indicating that shipowners are going big on investing in new capacity,” says Peter Sand, BIMCO’s Chief Shipping Analyst.
“Size still matters, but it’s no longer the only thing that matters. Your ships must be prepared to adapt to emerging trade routes, and many of the new ships ordered will be equipped with scrubbers,” said Sand.
The 16,000 TEU vessel has been the most popular order in 2021 to date. In February, March, April, and June, as many as 60 container ships with a cargo-carrying capacity of 16,000 TEU each were ordered by only five different owners. Half of them are ordered by two Top-4 tonnage providers and one small, while the other half are ordered by operating liner companies.
“It is very much a sign of the times too; you go big, or you don’t go at all. You order four, five, or six ships, or as much as 20 units, in one go, and at one yard only. The buying power when you spend USD 2.5bn is significant,” says Sand.
Shipowners have observed the changing trading patterns that have formed in recent years to date. Changes in trade patterns due to the US-China trade war and the COVID-19 outbreak have made the more “versatile” 13,000-16,000 TEU vessels preferred over Ultra Large Container Ships (ULCS).
No more than 22 ULCS will be ordered during the first seven and a half months of 2021. On February, 14 24,000-24,100 TEU vessels were ordered and in June, another eight 23,500-24,000 TEU vessels followed.
Sources: https://www.bimco.org/news/market_analysis/2021/20210826-container_ship_orders_due_for_deli
