CONTAINER SHIP FLEET EXPANSION RECORDS FASTEST GROWTH IN 15 YEARS
The global container ship fleet is experiencing its fastest growth in 15 years, marking a significant expansion in reshaping the shipping industry landscape. Since the beginning of the year, the fleet’s capacity has surged by 1.6 million TEUs (twenty-foot equivalent units), representing an 11% increase from the previous year, according to Niels Rasmussen, Chief Shipping Analyst at BIMCO. This growth brings the total capacity to 29.5 million TEUs, underscoring the robust demand for container shipping.
The first half of 2024 witnessed unprecedented levels of new ship deliveries, with a total of 264 ships entering service. These ships, boasting a combined capacity of 1.6 million TEUs, represent a two-thirds increase over the same period last year when the previous record was set. This surge in capacity is driven by strong cargo volume growth and strategic rerouting of ships via the Cape of Good Hope, which has also contributed to a decline in ship recycling. Only 36 ships, with a combined capacity of 51,000 TEUs, were recycled during this period.
Despite the current high capacity, shipowners continue to place new orders, demonstrating confidence in the sustained demand for shipping services. So far this year, 63 ships with a combined capacity of 400,000 TEUs have been ordered, maintaining a high order book-to-fleet ratio of 19%. The order book is robust, with deliveries scheduled through 2028 and an average of 1.5 million TEUs expected to be delivered each year from 2025 to 2027.
The growth of the container ship fleet is primarily driven by the 12,000-17,000 TEU segment, which has expanded rapidly. This segment now accounts for 22% of the total fleet capacity and has grown by 25% year-over-year. It represents nearly half of the overall fleet’s growth and has been a key driver of expansion in recent years. This trend is expected to continue, as more than 50% of the capacity on order falls within this segment.
In contrast, ships larger than 17,000 TEUs, which dominated growth from 2015 to 2021, now make up only 17% of the current order book. These larger vessels are operationally limited to specific trade routes in Asia and Europe, and the existing fleet of 212 ships is sufficient to cover these lanes.
The container fleet’s capacity is projected to exceed 30 million TEUs for the first time by the end of the third quarter of 2024 and reach 30.5 million TEUs by year-end. By 2027, the current order book will add another 4.3 million TEUs to the fleet. However, with cargo volume growth unlikely to match this rapid expansion, an increase in ship recycling is anticipated to moderate overall fleet growth. Furthermore, if shipping routes return to the Red Sea and the Suez Canal, the demand for additional ships could decline, contributing to a more balanced market.
The rapid growth of the container ship fleet reflects the industry’s response to evolving market dynamics and increasing demand for shipping capacity. While the current expansion presents opportunities, it also poses challenges that will require careful management of fleet growth and operational strategies. As the industry navigates these changes, the focus will likely shift toward optimizing existing assets and exploring innovative solutions to meet future demand efficiently
The peak summer shipping season brings a surge in volume, worsening existing challenges such as the ongoing issues in the Red Sea region. These complications have led to significantly higher shipping costs and severe equipment shortages. As freight forwarders, it is essential to develop and implement strategies that ensure the smooth movement of goods, support customer satisfaction, and keep the industry running efficiently. Here is how we can achieve these goals.
Dubai has rapidly emerged as a global leader in trade and logistics, capitalizing on its strategic location, world-class infrastructure, and favourable trade policies. This thriving city stands out as a pivotal hub connecting the East and West, providing efficient pathways for goods to travel by road, air, and sea. The logistics sector significantly contributes to about 14% of the UAE’s GDP—a figure poised for further growth.
Bhanu Nazir
Abhiram Hrithwik
Innovation was a key theme at the Breakbulk Futures Zone, where leading industry innovators showcased their latest products and services. The event also emphasized education, with 14 main stage sessions featuring over 52 speakers, Breakbulk Futures sessions with 13 speakers, chartering workshops mentored by the Institute of Chartered Shipbrokers, and an Education Day involving 191 students.
The Breakbulk event provided CSS with an invaluable platform to forge strategic alliances and network with global companies. It also offered a venue for discussing the latest developments and technologies in handling breakbulk and project cargo. The knowledge and experiences gained at Breakbulk Europe have empowered the CSS team to develop new ideas and create innovative solutions for future projects.
Rakesh’s success story is a testament not just to his efforts, but also to the incredible support he has received from his colleagues, customers, and mentors. He extends his heartfelt thanks to all those who have been a part of his journey at CSS. Their guidance, encouragement, and contributions to his professional development have been invaluable, and he is deeply appreciative of their role in his success.
The 2024 Neptune Cargo Network Annual Partnership Meeting in Phuket was more than just a conference; it was an enriching experience that combined professional development with the allure of a tropical paradise. Attendees left with not only new business insights and contacts but also cherished memories of their time on one of Thailand’s most beautiful islands. As the Neptune Cargo Network continues to grow and evolve, events like these play a crucial role in fostering a global community of logistics professionals. The success of the Phuket meeting sets a high benchmark for future gatherings, promising even more impactful and enjoyable experiences in the years to come. As delegates departed Phuket, they left with renewed connections, fresh insights, and the anticipation of future gatherings that will continue to build on the success of this year’s landmark event.
Thekkinkadu, shining in the light of the beautifully decorated ‘pandals’ (temporarily erected man made structure illuminated with colors and lights) and the torchlights along with the elephant’s caparison or ‘nettippattam’ lures us again into the grandeur of tradition.
I believe is blessed by the Gods & Goddesses of Thrissur to commentate Pooram for Television channels, and with this year Pooram which was celebrated on May 19th and 20th 2024 completed Nine blessed Years. I feel, am fortunate to be appointed to speak about my Thrissur Pooram for a Global audience, particularly the ‘Kudamaatom’, which is a swift and rhythmic changing of colored & sequined parasols. This is listed as one of the major events of Pooram, where both the Thiruvambady and Paramekkavu deities on caparisoned elephants meet face to face, accompanied by other elephants, and we title this moment as “Divine Durbar”.
The DWC airport expansion in Dubai South is all set to have a huge impact on the shipping and logistics industry. The expansion would include the usage of solar power and green aviation fuel. This is a huge step in reducing the environmental footprint of Dubai. Incorporating sustainable transportation in the future is the way to go ahead for shipping and logistics companies.
The expansion of the DWC airport has brought several benefits to freight forwarders. The expanded facilities of the airport can now handle a higher volume of cargo, accommodating the growing demands of the logistics industry. The infrastructure is designed to scale with future growth, ensuring long-term sustainability and adaptability. Enhanced processes and state-of-the-art technology have streamlined operations, reducing turnaround times and increasing productivity. Larger volumes and efficient processes lead to cost savings, benefiting businesses and customers alike. The unique corridor connecting rail, sea, and air networks maximizes logistical efficiency and flexibility.
The business landscape will become increasingly competitive moving forward; however, the market is poised for substantial growth, with expectations of exponential expansion. The United Arab Emirates Freight and Logistics Market is projected to be valued at 20.11 billion USD in 2024, with an anticipated increase to 30.19 billion USD by 2030.
Approximately 30 percent of global trade passes through the Red Sea via the Suez Canal, the most direct route between Europe and Southeast Asia. Heightened security risks have necessitated increased measures, prompting shipping companies to reroute vessels away from high-risk areas, thereby incurring additional costs for enhanced security. These challenges have also influenced insurance premiums for ships operating in these waters, impacting global trade.
Etihad Rail: Etihad Rail is a major project that will transform freight logistics in the UAE. Once completed, it will connect Abu Dhabi to key cities and ports across the Emirates, facilitating efficient and cost-effective transportation of goods. This rail network is expected to reduce road congestion and lower carbon emissions.
On June 1st 2024, 600 students in total from three primary schools received essential school supplies, such as school bags, umbrellas, and pencil boxes aiming to bring joy and encouragement as they start their educational journey. In addition, there also a lunch hosted for students, teachers and parents enhancing the sense of togetherness.
CSS’s journey in the Friends Super Cup was defined by collective effort. Each match showcased the team’s hard work and determination. From the very first game, the team set a high standard. What made them emerge as victorious was Safwan’s incredible penalty save. Team members like Praveen, Adul, and John further highlighted the team’s strengths. Their contributions on the field were instrumental in their success, with each player showcasing exceptional skill and a relentless drive to win. Behind the team’s on-field success was the unwavering support and encouragement from key team members who were not always in the spotlight but have been indispensable to the team’s achievements.
“With a team of seasoned professionals committed to excellence in sales, operations, coordination, and customs clearing, CSS Group’s decision to open a branch in Kenya in 2023 marks a strategic move to tap into new markets & strengthen its presence in East Africa.” The company is expanding its operations beyond the Middle East and Indian subcontinent. We have established the benchmark for excellence and efficiency in Kenya’s shipping industry. Our skilled team members illustrate our commitment to offering top-notch services, as they bring expertise and abilities to every project. LCL Import and Export Consolidations supplies warehouse and distribution facilities throughout Kenya, overseeing complex customs clearance procedures, creating effective sales campaigns, implementing efficient coordination strategies, or ensuring smooth operations. With the resources available, the CSS Kenya Team can effectively and competently handle a wide range of shipping requirements.
A surge in ship power – Get ready for a tidal wave of new ships flooding the container shipping scene as we see, like a wave crashing onto the shore. This wave follows a period of big profits for shipping companies, who spent some of their extra cash on ordering brand-new ships. The scale of this wave is huge, as the capacity of the new vessels ordered is equivalent to good of the global fleet, which stood at lower 2020. But here is the catch: this significant increase is happening just when there is a drop expected in how much stuff needs to be shipped around the world, estimated to be around 3% to 4% for both 2024 and 2025. And there is more. Notably, a lot of these new ships are mega-ships, the giants of the sea. But here is the problem: they are not very flexible at ports, which makes it harder for shipping companies to choose where to send them. While companies can try moving ships around or getting rid of older ones, the shadow of this significant increase in ability still hangs over their profits and plans.
Extreme weather conditions and their impact on shipping – This year as forecasted, which could result in extreme weather conditions affecting international shipping. For instance, low water levels caused by drought are affecting the Panama Canal, reducing its ability for fully laden vessels. Similarly, the Rhine River in Germany and the Great Lakes in the US are experiencing low water levels, posing challenges for inland navigation. These weather conditions have implications for container shipping, such as reduced volumes, changes in trade patterns, and increased pressure on alternative modes of transportation. The limited ability of waterways will also lead to a shift towards road and rail transport, resulting in higher costs and increased emissions. These extreme weather conditions are expected to continue influencing international shipping.
The changing face of global trade – In the past, Western powers dominated global trade, while the East provided raw materials and affordable goods. But times are changing. China has become the world’s manufacturing hub, with emerging players like India and ASEAN countries gaining prominence. As a result, the economic focus is shifting towards the East. Meanwhile, Europe is facing challenges with slow growth and recessionary trends, stepping back from its earlier global dominance. What does this mean for us in shipping – Get ready for increased trade with these growing markets. We will need smaller ships to adapt to these contemporary trends. Brace yourself for a transformative journey as we navigate through these changing waters, setting sail towards new opportunities in global trade!
