Freight carriers stuck with overcapacity?

15 December 2023

Shipping lines don’t just have too many ships right now, they also have too many containers, and are selling off their surpluses without replacing them.  As such the global pool of containers available for shipping is predicted to contract by 2.6% in 2023, with a further reduction in 2024, according to leading industry voices. 

Drewry, the maritime research consultancy, reports that carriers have too many 40-foot high-cube containers in particular, having anticipated further growth following high demand for this type in 2021, when they accounted for 85% of all dry freight containers produced.

The Loadstar reported in November that high numbers of surplus containers are waiting in empty-container depots, incurring storage costs on top of normal lease charges.  It also commented that “for the 50% of boxes that are carrier-owned, lines are struggling to offload ageing equipment into the saturated second-hand market”, citing evidence that the UK resale price a 40-foot high-cube, cargo-worthy container has fallen to about 25% of October 2021 levels.

Speaking to a podcast produced by the Loadstar and Dimerco Express Group, the former chairman of Evergreen and Yang Ming container lines, Bronson Hsieh, suggested that container shipping CEOs have “killed the golden goose” by ordering too many ships, and by focusing too much on the largest vessel sizes that, he suggests, will not be suitable in the future, as more trade shifts away from China to other centres in South Asia, Southeast Asia and Central America.

Exporters have had to deal with great instability in freight costs during the last few years, as the global pandemic and war in Ukraine sent shockwaves through the system.

See details of our full shipping service here.

Follow Chamber International on Twitter @ChamberInt  and on Facebook for the latest in international trade.