“Shipping companies continue to place orders for new container ships despite the drop in freight rates, and the order book has expanded. According to Niels Rasmussen, a chief shipping analyst at BIMCO, “the record high order book of 7.54 million TEU will result in significant changes to the container fleet in the coming years.”
8.61 million TEU have been contracted during the past ten quarters, equal to the amount over the previous 30 quarters. At 7.54 million TEU, the order book now equates to 28.9% of the current fleet. It has now grown for ten consecutive quarters, setting new records each of the last four quarters.
Recycling reaches 1 million TEU
“The substantial fleet growth will be caused by the enormous order book. Currently, 5.03 million TEUs are expected to be delivered in 2024 and the remaining months of 2023. The fleet may soon surpass 30 million TEU for the first time, up 16% from now, since we anticipate recycling to reach approximately 1 million TEU during that time,” says Rasmussen.
The number of fuel types used will likewise rise when the ships are delivered. Compared to only 10% of the current fleet, 57% of TEU capacity in the order book is represented by ships that have some level of preparedness for alternative fuels. The first ammonia-ready ships will also launch together with the first methanol-using ships being delivered. Five distinct fuels, including LNG, methanol, ammonia, and low- and high-sulfur fuel oil, may be used in the near future. Establishing a single pertinent rate benchmark for the time charter and asset markets will become harder as the usage of alternative fuels rises.
Fleet capacity peaks
The operators’ ownership stake in the fleet will increase concurrently. The operators’ ownership percentage of the fleet’s capacity peaked at 50% ten years ago, but it has since risen to 61%. Given that operators control 65% of the order book capacity, this percentage will grow even more over the next few years. The largest ships of non-operating owners are frequently bound by long-term charter agreements, leaving primarily smaller ships to participate in the short-term charter market. The ability of operators to quickly alter fleet capacity through the utilisation of the time charter market is thus deteriorating due to the rising ownership share.
Rasmussen emphasises that the advent of alternative fuels will help cut greenhouse gas emissions and that new ships will be more fuel efficient than the majority of existing ships.
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Source: Xinde Marine News