- Slower fleet speeds and ageing tonnage continue to limit effective capacity
- Congestion trends are mixed, offering only partial relief to supply tightness
- Newbuilding and demolition trends point to longer-term structural constraints
As 2025 draws to a close, dry bulk supply fundamentals show tightening that goes beyond headline fleet numbers. Environmental regulations, ageing ships and fuel efficiency limits have pushed owners to operate at slower speeds, reducing effective capacity even when freight rates improve. This has been most visible in larger segments, where speed recovery has remained muted despite stronger earnings in the second half of the year.
Longer-haul trades, particularly from West Africa, have amplified this effect. Slower steaming on extended routes stretches voyage durations, lifting utilisation levels and tightening tonnage availability across both Capesize and smaller bulker segments.
Congestion Offers Only Limited Relief
Port congestion has eased in some key regions, releasing a degree of capacity back into the market. Discharge congestion at Chinese ports declined year-on-year, helping offset some of the tightening caused by slower fleet speeds. However, this relief has been uneven and insufficient to materially loosen overall supply.
Elsewhere, congestion risks remain a swing factor. Periodic loading delays in emerging export regions have already shown how quickly vessel availability can tighten, triggering sharp freight rate volatility when queues build unexpectedly.
Newbuilding Appetite Cools Further
Newbuilding activity slowed markedly through 2025 as high yard prices, long delivery timelines and policy uncertainty discouraged fresh orders. Owners have shown a clear preference for younger secondhand tonnage rather than committing to expensive newbuilds without firm charter cover.
Regulatory uncertainty has also influenced ordering behaviour. While fewer vessels are being ordered with alternative fuel propulsion, more designs now include retrofit flexibility, reflecting caution over long-term fuel availability rather than outright expansion plans.
Low Scrapping Keeps Ageing Fleet in Play
Demolition activity remains subdued, extending the trading life of older vessels and keeping surplus capacity in the system. Solid earnings since mid-year have supported values for mid-age ships, particularly in larger segments, reducing incentives to scrap.
Looking ahead, the combination of an ageing fleet, muted demolition, and a restrained orderbook suggests supply growth will struggle to keep pace with demand shocks. As the market moves into 2026, dry bulk fundamentals remain structurally sensitive to disruptions, with effective capacity far tighter than fleet statistics alone would suggest.
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Source: Breakwave Advisors
