As of 2024, 1.59 million TEU capacity has been contracted, making it the third-highest volume since 2008. This record is only surpassed by the first seven months of 2021 and 2022. According to the latest update from BIMCO, when combined with the 8.86 million TEU contracted between 2021 and 2023, the total contracting over the past four years has already far exceeded the previous record of 8.31 million TEU set from 2004 to 2007.

Since the beginning of 2021, the contracted capacity will add 44 percent new capacity to the global fleet. However, actual fleet growth will depend on the number of ships that are recycled, the update noted.

Niels Rasmussen, Chief Shipping Analyst at BIMCO, commented, “When only six ships with a combined capacity of 4,746 TEU were contracted in the fourth quarter of 2023, many assumed that the container ship contracting spree, which began in 2021, had finally cooled. However, the appetite for new ships remains strong, and year-to-date contracting has already surpassed the total for 2023. This brings the total contracted capacity since the start of 2021 to 10.47 million TEU.”

Since 2021, only 150 ships, totaling 0.24 million TEU, have been recycled. This low level of ship recycling means that the influx of new vessels has not been sufficient to lower the average age of the global fleet. The average age of container ships has increased from 13 years at the beginning of 2021 to 13.9 years today.

“Ship recycling activity has been very low since 2021,” Rasmussen continued. “The 3.88 million TEU contracted and delivered since then, combined with capacity contracted before 2021, has already contributed to a 25 percent expansion of the fleet since January 2021.”

Although freight rates and time charter rates faced challenges in 2023 due to market growth lagging behind fleet expansion, the ongoing Red Sea crisis has lengthened voyage times and increased the demand for ships this year. Had the fleet not grown significantly before the crisis began, the situation could have escalated into a major supply chain disruption.

Looking ahead, the fleet is expected to grow by at least 12 percent before the end of the decade, with an average annual growth rate of 2.4 percent. While cargo volume growth might keep pace, there is a risk of pronounced oversupply if fleet growth exceeds expectations and the Red Sea crisis is resolved, leading to a significant drop in ship demand, Rasmussen warned.