Container shipping industry grappling with overcapacity issues persisting until 2028.
The container shipping industry is grappling with overcapacity, a situation where supply exceeds demand, according to industry analysts. This overcapacity, projected to reach an average of 27% through 2028, was highlighted in the first half of 2025 when only 10 ships totaling 5,454 TEU were scrapped, a significant drop from the same period last year.
This overcapacity can typically lead to downward pressure on freight rates, increased idle capacity, and financial strain on shipping companies. When new container ships are delivered faster than global trade demand grows, overcapacity results, causing fierce competition and lower profitability.
Despite the aging fleets, demolition activity has stalled due to strong freight and charter markets. For instance, Braemar estimates current vessel orders total 9.6 million TEU, about 30.5% of the active fleet as of July 1. Moreover, 3.3 million TEU of new capacity is set for delivery in 2028 alone.
Shipowners are cautious about shedding tonnage due to multiple disruptions in recent years. This cautiousness, combined with the projected overcapacity, suggests a challenging period for the container shipping industry.
It's important to note that, at the time of writing, there are no direct or specific references in the available search results to Braemar's Quarterly Container Fleet Statistics or analyst Jonathan Roach discussing the impact of overcapacity on the container shipping industry from 2025 to 2028. As such, a precise, referenced answer cannot be provided at this time. If those reports become available or further details surface, those would be the authoritative sources to track developments on overcapacity impact in this period.
Braemar's Quarterly Container Fleet Statistics report that 2.3 million TEU of new capacity was ordered in the first half of 2025, contributing to the overcapacity situation. As the industry navigates this challenging period, it will be crucial to monitor these trends and adjust strategies accordingly.
- The overcapacity in the container shipping industry, which is expected to reach an average of 27% through 2028, is causing financial strain on shipping companies, increasing idle capacity, and putting downward pressure on freight rates.
- when competition among shipping companies becomes fierce due to overcapacity, resulting from new container ships being delivered faster than global trade demand grows.
- Despite the caution shown by shipowners and the stalled demolition activity due to strong freight and charter markets, the projected overcapacity and the 2.3 million TEU of new capacity ordered in the first half of 2025, as reported by Braemar's Quarterly Container Fleet Statistics, suggest a challenging period for the container shipping industry.
