The surge of newbuilding activity that started in the fourth quarter of 2020 is likely to tail off as fears emerge of a capacity glut when those orders enter service. “Spectacular container shipping market conditions and extremely strong sentiment have seen a record breaking boxship investment surge,” Clarksons said. “Newbuilding contracting in the year to the end of September 2021 has exceeded all previous annual contracting records in teu terms.” By late September, 468 units comprising 3.9m teu had been ordered, exceeding the previous full year record of 2007, when 3.3m teu was ordered.

Figures from Clarksons now put the containership orderbook at 5.6m teu at the end of the third quarter, up 185% year on year and more than double where it stood at the start of this year. “At 23% of fleet capacity, the orderbook was at its highest proportion since April 2014, though still moderate in the context of the period 2000-2009.” In 2008, the orderbook peaked at 61% of the existing fleet. While the orderbook was dominated by larger vessels, which accounted for 75% of capacity on order, recent contracting had also shown an uptick in demand for smaller, more flexible tonnage, the analyst said.

Recent contracting had pushed up the number of vessels in the 12,000 teu-16,000 teu size range on order, while the number of midsize units had risen to 89, comprising 600,000 teu by the end of September, and now accounts for 10% of the orderbook. “Charter owners and operator owners have both been active in the containership newbuilding surge,” Clarksons said. “In the period between the start of the fourth quarter of 2020 and the end of the third quarter of 2021, 48% of the contracted capacity was ordered by charter owners and 52% by operator owners.” In the 12,000 teu-16,999 teu segment, 46% had been contracted by charter owners and 54% by operator owners.  For the 4,000 teu-7,999 teu segment there had been “notable interest” from charter owners, with 60% of the contracted capacity since September 2020 in this category ordered by a charter owner.

The orderbook also reflected increasing interest in alternative fuels and environmental technology, said Clarksons. “While there is no clear consensus on technology or fuel choice, LNG dual-fueled containerships remain a popular option for containership owners, with 57 LNG-capable units of 700,000 teu contracted in 2021 to the end of September, taking the LNG capable orderbook to 85 units of 1.2m teu.” This accounted for almost one fifth of capacity ordered this year, it added. Nevertheless, scrubber-fitted vessels were still a popular choice among owners, accounting for just under half of capacity contracted by the end of September.

Clarksons warned, however, that the past year’s boom in containership ordering may now be coming towards an end in the face of concerns regarding overcapacity. “Against the backdrop of a record-breaking surge in orderbook capacity, material supply side pressure from 2023 is now widely expected. At 2.2m teu, the current 2023 orderbook delivery schedule is equivalent to 8.6% of the 2023 fleet. 2024 will also see significant containership capacity delivered, with 1.9m teu scheduled for delivery, as at the end of September 2021.”