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Orders so far have been more than 12 times higher than for the first five months of 2020 and more than 60% higher than the previous record set at the start of 2005
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The most popular ship type ordered has been ultra large container ships in the range of 15,000 TEUs to 16,000 TEUs
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Vast majority of tonnage ordered so far will be delivered in 2023, totaling 1.5 million TEUs
Container ship ordering at the start of the year has been truly record-breaking with 2.2 million twenty foot equivalent units (TEUs) already ordered from January 1 to May 25, according to new data from the Baltic and International Maritime Council (BIMCO).
This is more than 12 times higher than the 184,254 TEUs ordered in the first five months of 2020 and more than 60% higher than the previous record dating back to the start of 2005, BIMCO said.
“The vast amount of money pouring into container shipping is finding its way into the shipyards, with the current tightness in the supply of ships incentivising some owners to expand their fleets,” said BIMCO’s chief shipping analyst Peter Sand.
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Container shipping lines have been reporting strong earnings since the second half of 2020 due to a cocktail of factors including surging consumer demand, an e-commerce boom, faster-than-expected reopening of the global economy, and early recovery from the impact of the pandemic of Chinese manufacturing activity.
Moreover, disruptions such as port congestion and container shortage have led severe imbalances and soaring freight rates as shippers scramble to get their shipments to their customers amid tight vessel space.
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BIMCO said the most popular ship type, measured in TEU as well as number of ships, has been ultra large container ships (ULCS), which have a capacity of 15,000 TEUs or higher. Of these, 89 have been ordered with an average capacity of 16,622 TEUs.
This, however, masks the fact that no ships between 16,000 TEUs and 23,000 TEUs have been ordered, with demand polarized between 15,000-TEU and 16,000-TEU ships on one side and 24,000-TEU+ ships on the other.
In fact, there are 14 orders for ships between 24,000 TEUs and 24,100 TEUs, larger than the biggest ship currently in the fleet which has a capacity of 23,964 TEUs.
Far more popular have been 15,000-TEU to 16,000-TEU ships, of which 75 have been ordered, totaling 1.1m TEUs.
“The biggest of the ULCS are proving less popular with carriers seeing the 15-16,000 TEU ships as a better option. This is because they still offer solid savings from economies of scale while not putting the same limits on flexibility as the 20,000+ TEU ships have in terms of trading patterns,” said Sand.
The three big shipbuilding nations are the only ones to have cashed in on the high container ship contracting, with China winning the most deals (145), South Korea in second place (63) and Japan rounding out the trio (21).
The vast majority of the tonnage ordered so far this year will be delivered in 2023, which according to BIMCO estimates will see 1.5 million TEUs delivered. This would make it the busiest year for container ship deliveries since 2015.
Photo by Diego Fernandez on Unsplash
