World Fleet of Container Ships: Scrapping Potential


Container shipping markets face a serious risk of overcapacity in the coming years, with a total of 7.3 Mteu of new capacity being built, representing 28.3% of the existing cellular fleet, which it is expected to hit the market by the end of 2025. We tell you what is happening with the world’s containership fleet: what is the scrapping potential? according to Alphaliner.

In the years 2023 and 2024 alone, a total of 5.1 Mteu of newbuild tonnage will be added to the fleet, with 2.3 Mteu planned for next year and 2.8 Mteu for 2024. By comparison, the containership fleet sees only around 1.1 Mteu of new tonnage. capacity that will hit the water in 2022, about the same as the previous year, reports Alphaliner.

They also add that as the world heads into what could be a long-lasting recession with an anticipated drop in seaborne trade, the market is likely to be unable to absorb such a flow of new capacity being built.

Demolition will be the main way to cut off supply and mitigate risks of overcapacity, but it remains to be seen how much of the existing fleet could be effectively demolished, considering their average age of just under 14 years.

The upcoming EEXI and CII carbon regulations could also contribute to reducing ship supply, with a significant part of the existing fleet having to slow down to comply with the new rules imposed by the IMO. Older tonnage struggling to meet the new standards will be forced to withdraw from global shipping.

How old is the world fleet?

The world fleet of cellular container ships has 5,627 vessels of 25.5 Mteu. It shows an average age of 13.5 years according to the most recent Alphaliner data.

The largest group of ships is in the 14 to 16 year age group, with a total of 1,239 ships of 4.2 Mteu. There are only 77 container ships of 121,671 TEUs of 30 years or more, followed by 347 units of 533,478 TEUs of 25-29 years and 678 vessels of 1.85 Mteu of 20-24 years.

There is, therefore, a total of only 655,149 TEUs of ‘scrapping’ tonnage aged 25+, but a much larger total of 2.5 Mteu of potentially ‘scrapping’ tonnage totaling 1,102 vessels, if we move the indicator towards down to include boats 20 years of age and older.

Nonetheless, a considerable number of ships 20 years old or a little older are likely to remain in trade for a few more years, especially the tonnage of some carriers and smaller ships for which there are currently no (or few) new-build replacements. . The extension of the life of this tonnage must obviously make technical and economic sense and allow compliance with the latest environmental regulations.

While the removal of 2.5 Mteu of capacity that is 20 years old or older would be critical to help mitigate the impact of the 5.1 Mteu new-build capacity due to be delivered over the next two years, this will not happen overnight. the morning, says Alphaliner.

So it remains to be seen whether some younger 15-20 year tonnages, especially those ships with poor designs and uneconomic fuel consumption, could also be demolished, helping to balance supply and demand. At the end of the day, a lot will depend on how strong load demand is when the flow of new buildings hits the market.

How big are the oldest ships? And the newest?

The oldest size range is the 500-999 teu segment, with an average age of just under 17 years, of which 239 units are 20 years or older. The lack of tonnage turnover in this segment has been a constant problem and raises the question about the future of this size of ship. The near absence of newbuildings explains why even the oldest ships in this segment continue to trade, with some regional carriers keen to extend the life of their tonnage as much as possible.

However, new carbon regulations could force some of these vessels to retire, and carriers would have no choice but to go for larger, more modern units to cover their regional and feeder needs or buy new builds themselves. At the other end of the spectrum, there are no scrap candidates in the ‘ULCS’ and ‘megamax’ fleets, these segments being by far the youngest in the current global containership fleet.

Source: Alphaliner

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