The global container shipping industry is heading towards a significant capacity challenge as a surge in new vessel deliveries threatens to outpace the market’s ability to absorb additional tonnage. According to Drewry, supply-side capacity is expected to grow by 8.8% in the first year, followed by increases of 12.1% and 10% over the next two years, putting carriers under growing pressure to manage fleet deployment and maintain market balance.
Speaking during Drewry’s Container Market Outlook, Simon Heaney, senior manager at Drewry Container Research, stressed that these forecasts already account for scrapping, delivery delays and other measures intended to limit the expansion of available capacity.
Heaney also questioned the public messaging of major container lines, arguing that their attempts to downplay the threat of oversupply amount to a public relations exercise. In his view, the scale of incoming tonnage makes it increasingly difficult for the industry to avoid a capacity surplus.
Operational disruptions will struggle to deal with the influx of ships
Senior shipping executives from liner operators that reported positive second-quarter earnings cited congestion as a critical factor behind trade imbalances. “Landside supply chains are under pressure and ports are facing bottlenecks, which have stretched logistics networks to the limit, with little chance of significant relief in the short term.
Drewry recognises these are structural, not temporary, disruptions. “The bottleneck and infrastructure constraints will slow the change of nominal vessel capacity into effective capacity that can be used,” says Heaney. But he warned that the effect of these constraints will be increasingly diluted by the number of new ships entering service.
The analyst’s conclusion is obvious: overcapacity is inevitable.
But the ports and landside infrastructure will also have a role in determining how much capacity can be efficiently deployed at any one time and so will impact the imbalance. Other factors that could affect the outlook include geopolitical disruptions, adverse weather and industrial action.
The recent events in Asia with weather conditions forcing port closures are a reminder of how quickly outside disruptions may affect shipping operations. At the same time, this year’s industrial action at European ports has demonstrated the vulnerability of logistics networks to labour-related disruptions.
Newbuildings and returning Red Sea traffic will increase the available tonnage
Drewry expects new vessel deliveries to add 2.3 million TEU of nominal container capacity to the global fleet. Another 2.6 million TEU could come back into the market as vessels start transiting the Red Sea again instead of diverting around the Cape of Good Hope.
The consultancy predicted that 80% of the tonnage now being diverted from the Red Sea route will return by February 2027. The change would free up a lot of capacity in the global shipping networks, adding to the pressure of newbuild deliveries.
Heaney believes that carriers are trapped in what he calls a position of “competitive prisoners”. Some operators are already back in the Red Sea corridor as they are attracted by lower round trip costs, shorter journeys and better network integrity.
These advantages can encourage individual firms to return to the road, but also put pressure on competitors to do the same. Thus, decisions to improve the operating efficiency of one carrier can help to increase the available market capacity in general.
Fleet management measures will only partly offset the surplus
Carriers have several options for absorbing additional tonnage, including slower sailing speeds, temporarily idling vessels and demolishing older ships. However, Drewry’s estimates indicate that these measures, together with reduced port productivity, will not be sufficient to counterbalance the combined impact of newbuild deliveries and the return of diverted vessels.
The consultancy identifies four factors that will help absorb capacity:
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Reduced port productivity: 109,000 TEU.
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Idle vessels: 204,000 TEU.
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Slow steaming: 217,000 TEU.
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Vessel demolitions: 213,000 TEU.
Although these adjustments will reduce the amount of capacity available to the market, their combined effect remains limited compared with the volume of additional tonnage expected to enter service or return to established routes.
Heaney concluded that the various capacity-reduction measures would collectively fail to offset the gains. Taken together, they are expected to reduce the overall net capacity surplus by around 20% compared with a scenario in which the relevant variables remained at their 2026 levels.
For container lines, the challenge will therefore extend beyond managing congestion and adjusting sailing schedules. The industry must also contend with a growing fleet, the restoration of Red Sea services and the limited ability of operational measures to absorb the resulting increase in supply.
