Global sea freight has been severely disrupted by the COVID-19 pandemic, as well as a shortage of shipping containers, not at all helped by the stranded Ever Given in the Suez Canal some months ago. But the sector is now recovering and brought a boom in new container ship orders, as the industry grapples with a shortage of vessels.
New shipping capacity is forecast to reach record levels by 2023, as the post-pandemic recovery steams ahead, and shipping companies, buoyed by soaring freight prices, are splashing out on expanding their fleets.
However, despite orders being placed for at least 276 new vessels in the first seven months of 2021, which would add just over 10 per cent capacity to the global container fleet, it takes two years to build a new ship, meaning that the availability of container ships will continue to prevail in coming years, according to the FT.
Acerbating the issue is the fact that the number of shipyards around the world has fallen by two-thirds since 2007, and Andi Case, chief executive of Clarksons, the world’s largest shipping broker, said: “We are miles off oversupplying the fleet.”
The 115 shipyards still in operation have received a deluge of orders for vessels capable of carrying 3.2m 20-foot containers, according to Clarksons Research.
However, while orders are 10 per cent more than in 2019, they are still 60 per cent less than in 2007, and experts are concerned that it will not be enough to meet global demand, which surged during the latter half of 2020 and led to skyrocketing freight rates.
Some industry experts have expressed concerns about over ordering, despite the increase in demand, and have said that the container shortage and infrastructure bottlenecks should be addressed first.
But without any extra capacity, supply chains will be more vulnerable to one-off disruptions, such as the Ever Given incident and Chinese port closures that have caused chaos this year.
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