During the COVID-19 pandemic, profits in the container shipping sector have risen remarkably along with the importance of international freight traffic. One might assume that this would logically lead to a surge in orders for newbuilds. Yet the opposite is the case: the orderbook is still near record lows. Whereas it stood at over 60% of the existing fleet in the financial crisis, it currently stands at around ten per cent. This comes at a time when a growing part of the active fleet is approaching scrapping age.
What are the reasons for this paradoxical situation? Technological and regulatory uncertainties play a key role, alongside market developments.
Author: Ralph Johann
Published: February 2021