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Freight Rate War Looms: Global Container Fleet Hits 7,000 Vessels, Triggering Overcapacity Warnings

Views: 0 Author: Site Editor Publish Time: 2025-12-05 Origin: Site

Recent data from shipping research firm Clarksons reveals a historic milestone: as of early November this year, the global container ship fleet has exceeded 7,000 vessels for the first time. Over the past 37 months, the fleet has grown by 1,000 vessels—representing a 16.67% increase in three years and setting a new record for expansion speed.

Analysts link this rapid growth to the post-pandemic shipbuilding boom between 2021 and 2022. Danish maritime consultancy Sea-Intelligence has issued a stark warning: the market may face a brutal freight rate war reminiscent of 2016. Industry insiders widely agree that to maintain market health, shipowners must urgently accelerate the scrapping of old vessels and rationally control new ship orders.

The Gap Between Scrapping Needs and Reality

Linerlytica, an Asian container consulting firm, estimates that the global container shipping market needs to scrap approximately 4.5 million TEUs of capacity over the next four years to rebalance supply and demand. However, statistics from shipbroker Braemar tell a different story: as of late August this year, only about 12 vessels had been scrapped, totaling less than 8,500 TEUs—far short of the target.

New Ship Orders: A Growing Concern

On the newbuild front, global container ship orders surpassed 10 million TEUs by early September this year—equivalent to the total existing capacity of five Evergreen Marine fleets. Industry leaders have urged that new ship construction should focus on replacing old vessels and meeting environmental emission reduction requirements, rather than blind capacity expansion.

Clarksons further reports that the global container ship fleet now stands at 7,007 vessels with a total capacity of 32.7 million TEUs.

Since 2024, 936 new container ship orders have been placed, revitalizing the shipbuilding market. At this rate, the global fleet is on track to approach 8,000 vessels in the next three years. Currently, the global order book remains at a staggering 1,109 vessels, with 991 scheduled for delivery by the end of 2028.

2016 Freight Rate War: A Warning from History

Sea-Intelligence warns that the global container shipping industry is facing "structural overcapacity," which is expected to peak in 2027—with excess levels comparable to the 2016 freight rate war. Back then, overcapacity led to widespread industry losses and even the collapse of South Korea’s Hanjin Shipping.

The firm’s forecast is based on several key assumptions:

Red Sea Route Normalization: If the Red Sea route resumes normal operations by mid-2026, a large amount of previously diverted capacity will be released.
Accelerated Scrapping: Vessels over 20 years old are expected to be scrapped faster starting in 2026.
Short-Term vs. Long-Term Trends: A prolonged Red Sea crisis may delay overcapacity in the short term but cannot reverse the long-term trend.
Demand Risks: Changes in U.S. trade policies may suppress demand, while continued new ship orders will further exacerbate oversupply.

Industry Consensus: Action Is Needed to Avoid Crisis

Industry leaders acknowledge that there is a consensus on solutions to overcapacity—the key lies in unified action to accelerate old vessel scrapping and curb unregulated shipbuilding. If most companies fail to take decisive measures, the market adjustment period will be prolonged, and some firms may face severe operational crises.

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