The global bulk carrier fleet is experiencing a significant aging trend, with the average vessel age increasing from 8.6 years in 2018 to nearly 13 years in 2025. This shift has major implications for the shipping industry.
Key Factors Driving the Aging Trend
The primary reasons for the fleet’s increasing age are a prolonged slowdown in scrapping and modest newbuilding activity over the last decade. A delivery surge from 2010 to 2012 created a large cohort of ships that are now in the 11-to-15-year age bracket, which has become the most concentrated segment of the fleet. Meanwhile, the youngest age groups (under 5 years and 6-to-10 years) have shrunk due to a lack of new orders in the mid-2010s.
Reasons for Low Scrapping and Ordering
Owners have been reluctant to scrap older vessels due to low demolition prices, profitable trading opportunities, and the continued viability of these ships in less demanding trades. Concurrently, newbuilding orders have been low since 2017, a trend exacerbated by several factors:
- Regulatory Uncertainty: Owners are hesitant to invest in new tonnage due to a lack of consensus on future fuel standards (e.g., LNG, methanol, ammonia), preferring to extend the life of existing ships rather than risk an early investment in a particular technology.
- Financing and Capacity Constraints: Financing for new ships has been limited, and shipyards have prioritized building LNG and container ships, leaving less capacity for bulk carriers.
Market Implications and Future Outlook
The aging fleet has several key implications for stakeholders. For owners, while older ships can be cost-effective in the short term, they face rising compliance and fuel efficiency costs. For charterers, older vessels may offer lower rates but come with higher operational and reputational risks. Investors may see an aging fleet as a positive for freight rates due to limited supply growth, but they also need to be prepared for significant future capital needs for fleet renewal.
Looking ahead, the average age of the fleet is likely to continue rising through 2026-2027, potentially surpassing 13.5 years. A turning point is anticipated in the next five to seven years as the large 2010-2012 cohort nears the 20-year mark, which could trigger a sharp increase in scrapping if market conditions soften or environmental regulations become stricter. The future trajectory of the fleet’s age will depend on whether ordering remains firm and if scrapping accelerates mid-decade, driven by greater clarity on fuel standards and stricter environmental enforcement.
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Source: AXS Marine
