Vessel orders for the cellular fleet, currently standing at 9.95 million teu, will crash through the symbolic 10 million teu milestone with another significant order.

According to Alphaliner the orderbook is already at historic highs having smashed the previous record of 7.12 million teu, set in 2008, when orders reached a heady 7.19 million teu in 2022.

“Since mid-2024, carriers and non-operating owners have contracted close to 600 additional newbuildings. Subtracting some failed orders from that number and subtracting the numerous ships that have entered service since mid-2024, equals a net orderbook addition of around 2.80 million teu, pushing the global container vessel pipeline to 10 million teu. The orderbook-to-fleet ratio now stands at 30.4%,” noted the analyst.

Massive profits over the past five years have left carriers sitting on a cash mountain, allowing them to order vessels without debt. While decarbonisation regulations are also driving the boom in orders.

The easiest way to cut emissions and meet new environmental regulations is to slow vessels down and this will require more tonnage as ships reduce speed.

Moreover, Alphaliner said: “Despite a rapidly growing fleet, shipping lines still struggle to fill all the empty sailing slots in their schedules, and many services are short of tonnage. Subsequently, charter rates, secondhand asset prices and market sentiment remain high.”

New orders have become so numerous that slots in the near term have become difficult find, today’s orderbook stretches to 2030, far in excess of the usual two-year period for building a ship after the order is placed.

Overcapacity, however, is not a given, according to Alphaliner, with carriers believing that the long-term growth will justify the capacity inflation, while a ship need only to have a few years of profitability to make the investment worthwhile.

“The global population is still growing, and millions of consumers in regions such as India and West Africa will move into the middle classes over the lifetime of a container ship. Subsequently, containerized trade to and from these regions is expected to keep growing at a steady pace,” claims Alphaliner.

Whether that steady pace will mean that freight rates can be maintained at a profitable level is debateable.

Currently, the World Bank’s forecast is for a maximum average growth rate of 6% for container shipping, which would absorb the current orderbook, as long as vessels keep sailing around the Cape.

Alphaliner concedes: “A sudden slowdown in tonnage demand, for example due to a recession or routing ships back to the Red Sea, could see a rapidly-growing vessel fleet struggle for employment.”