The global shipping industry is undergoing a significant transition, with a noticeable shift from ordering large container ships to smaller vessels as trade routes evolve and supply chains diversify. This change is largely influenced by the rerouting of trade away from China, prompting shipowners to reassess their vessel size preferences.
In 2020, only 17 ultra-large ships, capable of carrying more than 17,000 twenty-foot equivalent units (TEUs), were set to be delivered, compared to 17 expected by 2025, highlighting a stark decrease in demand for these massive vessels. In contrast, the delivery of medium-sized ships, ranging from 12,000 to nearly 17,000 TEUs, is anticipated to rise significantly, with 83 vessels scheduled for completion in 2025, nearly five times the amount delivered five years prior.
Industry analysts emphasize that the economic viability of large vessels hinges on consistently filling their cargo capacity. With manufacturing dispersing to countries like India and Vietnam, the largest ships may struggle to find enough cargo to justify their size. Experts have pointed out that recent geopolitical tensions, such as attacks near vital shipping routes and potential trade tariffs under a new U.S. administration, further complicate the landscape for large ship operations.
The industry’s focus on medium-sized ships, while currently prevalent, does not negate the ongoing demand for larger vessels. Interest in new orders for ships above 18,000 TEUs is expected to rise again, particularly as profits rebound in the shipping industry. Notably, the Mediterranean Shipping Co. recently placed significant orders for larger vessels.
Despite the increasing number of medium-sized ships, several factors continue to challenge the industry’s reliance on super-sized vessels. These include the logistical difficulties posed by significant shipping lanes, fluctuating fuel supply issues, and uncertainties surrounding future regulatory requirements aimed at reducing emissions.
The market landscape is shifting, and while medium-sized ships grow in popularity due to their operational flexibility and lower costs, the future remains dynamic as shipping companies navigate complex global challenges.