Hookham: 'This is the year the container lines will see a reckoning'

Container lines are set for “a year of reckoning”, following alleged pandemic-era indiscretions, as a surge of new tonnage hits the already capacity-rich market and combines with an unstable global trading environment.

James Hookham, director of the Global Shippers Forum (GSF), told The Loadstar that while there had been several ‘false dawns’ when it came to capacity, he was now willing to bet that by the middle of the year, overcapacity would make its presence felt.

 “I have been saying it was the looming threat that would engulf the carriers, for the past two or three years, but for various reasons, it has not happened. In 2024 it was the Red Sea Crisis and in 2025 it was the instability caused by tariffs,” he said.

“All those situations did was postpone the inevitable and, as the orderbook has continued to grow, there’s still a lot of capacity out there still to arrive over the next two to three years.” Indeed, there have been some 633 vessels, representing 5m teu, ordered over the past 12 months alone.

At 5m teu of new orders, 2025 surpassed the previous year’s record 4.8m teu, with analysts noting that the orderbook-to-fleet share had surpassed 33%, leading Mr Hookham to suggest some carriers may fail.

“I think it will be a really critical year, and one which could put a lot of pressure on some of the less-resilient lines, bringing its own problems of possible further mergers or even business failures,” he noted.

“We have not been in this situation before, where we have had this level of excess capacity chasing such slow-growing and unpredictable demand, in such a fragile geopolitical landscape,” he added, although, he suggested carriers may be reading the situation a little differently.

Pointing to the influx of 17,000-plus teu vessels that delivered in the 2010s, Mr Hookham said carriers may be looking at the present state of excess capacity as reflective of what was seen then.

But he warned that taking such an approach negated a critical difference: that the current trading environment is not only typified by “sluggish signs of growth”, but also a degree of variability previously unseen – geopolitics threatening permanent change.

“This disrupts the sustained, predictable economic growth that had always been there, at least before Covid, and so inhibits long-term planning, which explains the popularity of the spot rate market,” added Mr Hookham.

“I think that, aside from the option of laying-up a lot of ships, you will see the carriers try to manage the spot market to avoid a meltdown in rates. We are already seeing this with blanked sailings and a recent slew of freight all kinds rate announcements.”

Such approaches reflect carriers’ typical efforts to “just sort of manage the capacity” – but Mr Hookham added that he did not believe pulling the levers that had traditionally worked for carriers would succeed this year.

“No, I think this is the year they will see a reckoning,” he concluded.