International Maritime
Scrapping virtually non-existent amid delivery deluge
Global container ship fleet deliveries and retirements by ship size, with forecast
TEU capacity
6,000,000
4,000,000-1,000,000 2,000,000
0
-2,000,000 |
|
|
|
2020
L
|
2025 |
2030 |
< 3,000 TEUs 3,000-5,000 TEUs 5,001-10,000 TEUs 10,001-15,000 TEUs 15,001-20,000 TEUs
> 20,001 TEUs Retirements
Source: Sea-web, S & P Global
© 2026 S & P Global
“ As Suez transits normalize and carriers regain access to shorter voyage distances, effective supply will rise sharply,” Heaney said during the webcast.“ Combined with an expected 8.1 % expansion of the global container ship fleet in 2027, this will exert substantial downward pressure on market balance.”
In early July, Maersk said it was routing its MECL service through the Red Sea and Suez Canal following the incident-free transit of the Majestic Maersk through the region as part of Gemini Cooperation’ s AE15 offering. The carrier has called it“ a gradual return” to Suez transits and said if the security situation deteriorates again, the services will revert to the Cape of Good Hope route.
“ It’ s very hard to see carriers not being absolutely pressed with massive amounts of oversupply.”
Murphy, speaking on the webinar, used Sea-Intelligence data to forecast the extent of the overcapacity facing the market should the Suez and Red Sea route remain out of bounds over the next three years, and if it was fully normalized next year.
“ The assumptions that we’ ve made is global demand will grow at 4 % from 2027 to 2030,” he said.“ It has grown in the last few years at 5.5 %, and that is higher than the long-term average of 3 %. We also assume 3 % of the capacity will be scrapped.”
Assuming there was no widescale return to Suez transits within the next three years and vessels continued to sail around Africa, Murphy said excess capacity would be between 8 % and 10 %.
“ To put that into perspective, during the freight rate wars of 2014 to 2017, we had 10 % excess capacity, so even at this relatively modest approach to supply
L and demand, we are heading into what looks like dire straits,” he said.
“ But what if in 2027, we see a return to Suez Canal and the 10 % of capacity that was soaked up by going around Africa is returned to the market? Then suddenly, we’ re looking at excess capacity of 20 %,” Murphy said.
The analyst took the assumptions even further to arrive at a“ horror scenario” where there was 3 % demand growth, no scrapping and a return to the Suez Canal.
“ Then we’ re in a real nightmare for the carriers with massive oversupply exceeding 25 %,” he said.
Pricing problems
Akhil Nair, global head of forwarding at Hong Kongbased Logisteed, said the market consensus six months ago was that in the heavily oversupplied container shipping business, a resumption of Suez Canal transits would return so much capacity that it would quickly lead to a rate collapse.
That logic no longer applies, with the Middle East war that has effectively closed the Strait of Hormuz changing the dynamic, Nair wrote in a LinkedIn post.
He said the rate-crash thesis assumed the disruption was singular and reversible. Red Sea rerouting added 10 to 14 days on Asia – Europe strings and absorbed 15 % to 20 % of effective global capacity through distance alone.
“ That capacity was always going to return as vessels normalized back through Suez,” Nair said.“ Carriers knew it, shippers knew it, and the forward rate curve reflected it.”
But Nair said the closure of the Strait of Hormuz presented a different class of risk. Approximately 21 million barrels of oil a day moved through Hormuz, about 20 % of global petroleum, plus a significant share of liquefied natural gas.
“ A sustained [ Hormuz ] closure, or even a credible threat of one, does not just reroute tonnage,” he said.“ It reprices insurance and energy, which reprices bunkers, which reprices every freight rate on every lane at once... That is not a routing problem. It is a cost structure problem.”
Carriers managed the Red Sea disruption through blank sailings and slow steaming, discipline tools that a consolidated market of 12 to 13 major carriers was able to deploy.
The closure of the Hormuz was different, however, with Nair noting that no amount of capacity discipline could defend against a bunker fuel spike that permeated globally to all trades.
“ This is why the [ Suez Canal ] reopening will not do what the bears expect,” he said, adding that the cautious return of carriers to the Red Sea route will have little effect on prices in a market where average pricing, as measured by the Container Trades Statistics global rate index, was already up 22 % year over year.
“ Bringing a service back into a market whose cost floor is being reset by Hormuz does not crash rates, it simply tests carrier discipline against a higher bunker base,” Nair said.
email greg. knowler @ spglobal. com
16 Journal of Commerce | August 3, 2026 www. joc. com