News / Capacity squeeze will ease as more newbuilds arrive, says Xeneta

© Natalia Dobrovolska

Additional tonnage being introduced to the ocean shipping market next year presents “an opportunity for shippers” to use the broad spectrum of carrier alliance strategies to their advantage.  

In Xeneta’s 2025 ocean shipping forecast, the analytics platform says “a large-scale return to the Red Sea seems inconceivable at present”, but a partial return could be on the cards for some carriers. 

Senior shipping analyst Emily Stausbøll advised: “This situation creates an opportunity for shippers, as long as they understand how to use the varying carrier and alliance strategies to their advantage.” 

Since Cape of Good Hope diversions extended lead-times last December, teu-mile demand has skyrocketed and ships that would otherwise have contributed to overcapacity in the market are being utilised.  

Indeed, Xeneta predicts teu-mile demand will “continue to be a key factor in understanding shifting freight rates”, but assured shippers that capacity tightness would ease as more new ships are delivered. 

According to maritime consultancy Clarksons, MSC is the carrier expecting the most new tonnage, with 582,000 teu across 46 ships scheduled for delivery in 2025.

The three carriers that make up the Ocean Alliance, Cosco, CMA CGM and Evergreen, will receive 591,000 teu, whereas the new Premier Alliance of ONE, HMM and Yang Ming, the smallest after the loss of Hapag-Lloyd, will see the fewest deliveries of new ships, at 230,000 teu. 

Zim still has the most chartered capacity, 91.3% of its fleet, which “has benefits to carriers”, says Xeneta, but when the market is tight, “they can struggle to find available tonnage when they are most keen to add to their fleet”.

Hans-Henrik Nielsen, global development director at NVOCC CargoGulf, told The Loadstar Podcast newbuilds being introduced to supply chains next year could cause a supply and demand imbalance. This will be particularly prevalent in the case of a partial or full return to the Suez Canal.  

“We have been, for two years, talking about that all the extra tonnage that was ordered during Covid that, when they come out of the shipyards, they will create an imbalance between demand and supply. So, there will be some change,” he said.  

“If you are one of those big liner operators, then clearly the problem, and the pressure on the commercial teams, will be significantly bigger… finding cargo is not the problem, but finding profitable cargo is obviously always a challenge for everyone.” 

Indeed, Xeneta predicts additional available tonnage will continue to ease freight rates in 2025. Ms Stausboll explained: “While the market remains tight, carriers with the largest tonnage will have the upper hand, but any easing in capacity – especially through a large-scale return of ships to the Red Sea – would transform the situation dramatically and put pressure back on carriers to maintain market share through aggressive pricing.” 

According to Xeneta, if carriers turn to demolition to re-balance fleets – assuming a return to the pre-pandemic average and that three-quarters of the ships older than 22 years will be sent for demolition – this will result in 1.8m teu leaving the global fleet. 

But it cautioned: “Even this high level of demolition would not be enough to turn carrier fortunes around in the case of a return to the Red Sea and the inevitable overcapacity in the market, given the many millions of teu delivered over the past four years.”