According to data from shipping analysis firm Linerlytica, driven by a recent wave of intensive newbuilding orders, the global container ship orderbook has reached a record 13 million TEUs, with the orderbook-to-fleet ratio also rising to 38.3%, a post-global financial crisis high.
The analysis firm warns that liner companies are currently “deeply entrenched in an endless battle for market share,” and the surge in orders has once again raised concerns about the prospect of overcapacity. The wave of newbuilding orders has fueled this rapid expansion—in the first four months of 2026 alone, new orders have exceeded 1.9 million TEUs, suggesting that total orders for the full year could surpass the annual record of 5.1 million TEUs set in 2025.
Most of the new capacity is scheduled for delivery in 2028, with confirmed orders for that year already reaching 5.2 million TEUs, leaving very limited available delivery slots. If all these slots are filled, total deliveries in 2028 are expected to exceed 5.5 million TEUs.
However, current market conditions do not reflect this outlook. Analysts point out that while ongoing disruptions on global trade routes are supporting freight rates and the charter market, this strength may be temporary.
Jonathan Roach, an analyst at Braemar, explains: “The container shipping market appears strong on the surface, but the current strength is largely ‘borrowed’.” Due to route diversions around the Red Sea and Suez Canal, voyage distances have lengthened and capacity has been absorbed, artificially tightening market supply.
Roach notes: “This supports the market, but it is not a long-term solution. The key question is what happens when everything returns to normal?” He believes that the supply side is the dominant factor determining the future direction of the container market.
Although the market is expected to remain relatively firm in 2026 due to route disruptions and declining operational efficiency, forecasts indicate that market conditions will change from 2027 onward.
At that point, as new vessel deliveries accelerate and capacity gradually cascades down to smaller and medium-sized ships, the small vessel segment will face increasing pressure. Roach states: “By 2028, overcapacity will no longer be a prediction, but a reality.” He expects downward pressure on freight rates, an increase in idle capacity, and ultimately a rise in scrapping activity.
Roach concludes that although demand is expected to grow at around 2% to 4% annually, roughly in line with global GDP growth, this is far from sufficient to absorb the massive influx of new capacity about to enter the market.
This pessimistic outlook is not yet reflected in the current market. Container freight rates have instead strengthened, driven by rising fuel costs due to the Middle East conflict.
The Shanghai Containerized Freight Index (SFI) reached 1911.40 points on April 30, up more than 40% from the end of February. Clarksons Research notes: “The upward effect from the Red Sea route disruption, combined with the delay in the timeline for a large-scale resumption of Red Sea transits, has created a stronger short-term outlook for the market entering the summer.”
The firm adds: “But the ‘underlying’ supply-demand fundamentals still point to a weakening market in the future, while macroeconomic risks also require close attention.”
Compared to the tanker or bulk carrier markets, the container market has so far been less affected by the US-Iran war. Liner companies have been able to pass on fuel costs to shippers. UK analysis firm Maritime Strategies International points out that as the Strait of Hormuz remains impassable, the initial supply-side support for the container market is expected to fade over time.
Inflation triggered by energy price shocks and weak consumer spending will lead to lower-than-expected container demand.
Maritime Strategies International concludes: “In this scenario, container demand will be particularly vulnerable, as it is highly dependent on the transportation of manufactured goods.
