Can carriers avoid overcapacity in 2027?

The backdrop is difficult to ignore. Around 5 mteu of new capacity has been ordered in each of the past three years, pushing the orderbook-to-fleet ratio to approximately 45%, its highest level since 2009. The orderbook is fast approaching 16 mteu, with September the second-busiest contracting month on record at 1.1 mteu, following major orders from the world’s two largest carriers: MSC (20 × 24,000 teu) and Maersk (20 × 18,600 teu).

The counterargument is that traditional supply-demand fundamentals no longer tell the whole story. Geopolitical disruption, port congestion and longer sailing distances have become increasingly influential, absorbing capacity and limiting the amount of nominal fleet capacity available to carry cargo.

Ultimately, the 2027 outcome will depend on whether demand growth, slow steaming and congestion can absorb capacity faster than new ships enter service. Our view? They won’t.

These disruptive forces are now structurally embedded in the market and will undoubtedly slow the conversion of nominal capacity into effective supply. But the sheer volume of new tonnage arriving means their ability to offset fleet growth will diminish. Overcapacity is, in our view, unavoidable. Its severity is the real uncertainty.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →