Alphaliner closely follows the evolution of the container shipping market and compounds its findings in online platforms and newsletters. From relevant logistics developments to port news and financial news, Alphaliner provides a wealth of information, detailed facts, and statistics on the world container fleet and the shipping industry overall.
The first portion of this webinar presentation looked at the world container fleet, its operators, and its capacities in 2021 compared to previous years.
The Effects of COVID-19 Disrupted the Logistics Industry
The year 2020 was challenging for many, and the global shipping and logistics industry was no exception. The effects of COVID-19 continue to cause supply chain disruptions and shortages that put pressure on the industry, from congested ports and container shortages to skyrocketing container rates .
Now, a shortage of shipping vessels is becoming another hardship for the industry, and new orders of ships are unlikely to solve the capacity shortage in time.
Shipping Vessel Statistics in the World Fleet
There are 53,000 merchant ships globally, but just 10 percent of these are container vessels. In the past 2 years, the amount of container ships has remained relatively stable, but the world fleet capacity has grown more than 7 percent (an equivalent of 1.6 million TEU).
The number of active container ships that do not follow commercial activity, are in yards for maintenance and repair, or are in long-term layup is still very low; most ships that are capable of sailing are on the water and in use.
Despite this, there remains a shortage of ships to meet growing demands.
*Snapshot from Container Ship Market - Review and Outlook 2021. Watch the full presentation here.
Carrier Consolidation of the World Container Fleet
Many shipping companies recently consolidated, and some carriers disappeared from the market altogether. Only a few shipping carriers now remain with a global structure.
The Top 5 Shipping Groups Are:
- Maersk
- Mediterranean Shipping Company
- CMA CGM Group
- COSCO Shipping Group
- Hapag-Lloyd
To see the rankings of all of the largest container shipping lines and their TEU and market share, see Alphaliner's top 100 list .
The evolution of this consolidation is significant when you look at the top 5 carriers. Market share stands at 65 percent compared to the 44 percent it was at 10 years ago.
Shipping Groups Hesitated to Order New Ships
With fluctuating demand due to COVID-19, many of the large shipping groups were leary to put in orders for new ships in early 2020. They were also hesitant to order new vessels before that due to upcoming environmental regulations on energy efficiency for the ships. After 12 years of constant decline, the order book reached a low point about halfway through 2020.
Shipping carriers realized they needed more ships to attempt to keep up with increasing demands, and they placed new orders that replenished the container ship orderbook in the second half of 2020 and first half of 2021.
New Orders of Ships Won't Be Ready in Time
Now, carriers expect a continuous increase in the demand of container shipping service needs. However, the new ships ordered in 2020 and 2021 won't be ready for active use until 2023 and 2024, as it takes 3 to 4 years from the original order of a container ship until its delivery.
If they had ordered ships in previous years, they would have them now. But, unfortunately, that ship has sailed.
Therefore, the building and delivery of these new ships won't solve the current capacity shortage.
Large and Very Large (Megamax) Container Ships Are Increasingly Popular
Carriers are opting to order and deploy large and very large ships for regional container services instead of mid-sized and smaller ships.
Megamax container ships generally have capacities of 18,000 to 24,000 TEU. Today, these ships make up only 12 percent of the current world fleet. Very large ships (that can carry 12,500 to 15,199 TEU) comprise 15 percent of the fleet. Mid-sized container ships (with capacities of 5,100 to 7,499 TEU) make up just 11 percent of all container ships.
While these percentages representing the amount of active ships are currently similar, new orders will skyrocket the amount of larger vessels.
Of the orders for new vessels, 26 percent are for the megamax container ships, and 17 percent and 33 percent are for very large and large ships, respectively. Only 6 percent of orders are for mid-sized ships, meaning the mid-sized class of vessels may almost disappear completely. Smaller vessels comprise even lower percentages of the order book.
While these large ships can transport more products, they are limited on where they can go, as they require deeper ports and larger cranes than smaller vessels. They also require more port resources when they berth.
*Snapshot from Container Ship Market - Review and Outlook 2021. Watch the full presentation here.
Are High Freight Costs on the Horizon?
Due to these issues, industry experts estimate it will be 3 or 4 years before the supply of vessels meets the demand. This increases the likelihood of heightened freight costs.
If you're worried about container or shipping vessel shortages, it's important to be part of a network of experts who know how to get things taken care of. Contact us today to learn more about how you can acheive procurement advantage through 7ConNetwork- the experts' platform for delivery.