Deliveries of containership surge in 2024 amid soaring fleet size and record orders

By October, shipbuilders delivered 410 ships totaling 2.5 million twenty-foot equivalent units (TEU), setting a new annual record. This is already a substantial increase over the 2023 full-year record of 2.3 million TEU, and an additional 0.5 million TEU is anticipated before the year’s end. Industry data reveals that 286 new ships, totaling 3.3 million TEU in capacity, have been added to order books this year, marking more than double last year’s contracting total.

With limited scrapping activity observed this year, the global container fleet has surged to an all-time high of 30.4 million TEU. This figure highlights the tremendous 30% fleet growth that has taken place over the 2020s. However, the growth rate of supply has sharply outpaced demand recovery post-COVID, which continues to present a mixed outlook for the sector. With global shipping volumes still stabilizing, the risk of an overextended market looms larger, raising questions about the sustainability of current expansion.

While ship scrapping often serves as a counterbalance to fresh orders by removing older, less efficient vessels from the fleet, 2024 has seen limited scrapping activity. This trend can be attributed to multiple factors, including strong charter markets for older tonnage and relatively high scrap metal prices that have disincentivized mass scrapping. However, this approach also contributes to potential overcapacity, as older ships remain in operation alongside newer additions. If demand does not match this pace of expansion, freight rates could face downward pressure, diminishing profitability and possibly creating a more volatile market environment.

One of the more nuanced aspects of the surge in ship orders is the purpose behind these new vessels…Despite this emphasis on fleet renewal, the current orderbook-to-fleet ratio remains high at nearly 25%, underscoring the sizeable influx of new capacity. Additionally, 39% of containerships ordered in 2024 are scheduled for delivery only by 2028 or later. This substantial lead time reflects both the sheer volume of orders and the capacity limitations within global shipyards, but it also underscores the sector’s strategy of gradual deployment to prevent immediate market congestion. All said, there still exists a crucial question for the industry – Whether global trade volumes will support this substantial capacity expansion or not…. As ship orders continue to climb, balancing fleet capacity with realistic demand forecasts becomes increasingly critical.

Analysts are concerned that a sustained imbalance could lead to intensified competition among shipping lines, which may cut into profit margins. Additionally, new capacity entering the market could affect freight rates, particularly if the global economic outlook remains fragile. Environmental regulations are also shaping the landscape, pushing carriers to consider fuel-efficient designs and alternative energy solutions. Newer containerships are often designed to reduce carbon emissions, aligning with industrywide pledges to achieve net-zero emissions by 2050. For some shipping companies, the current order book surge is an opportunity to future-proof their fleets in anticipation of regulatory changes that will likely increase the operational costs of older, less efficient vessels.

Technological innovations also play a key role. As fleets modernize, they are increasingly equipped with advanced digital systems, enabling real-time tracking, predictive maintenance, and automated route optimization. The adoption of these technologies can enhance operational efficiency, allowing carriers to offer value-added services that differentiate them in a potentially crowded market.

As the year progresses and additional capacity comes online, the industry’s ability to manage this growth responsibly—balancing fleet size with demand, embracing sustainable practices, and leveraging technological advancements—will likely determine the long-term viability of its current expansion strategy.