Issued on 3 Sep 20
Containership orderbook drops to historic low The global containership orderbook, seen as a percentage of the world fleet, has dropped to a historic low point this month, continuing the declining trend of the past few years. As per Alphaliner’s July data, the orderbook-to-fleet ratio now stands at only 9.4% or 2.21 Mteu. For the first time in more than 20 years, the global newbuilding pipeline thus fell below the 10% threshold. While much of the past decade’s declining ratio was primarily a statistical side effect of an ever-growing global fleet, this has fundamentally changed in more recent years. Throughout the first six years after the recessions of 2008 - 2009, and after an initial 20-month ordering lull, container ship orders kept coming in and the vessel pipeline remained stable in absolute terms, lingering around the 4 Mteu mark. At the time, many carriers and ship owners still believed in a relatively prompt recovery of the global economy and attempted to invest anti-cyclically to take advantage of attractive newbuilding prices. Ever since however, the orderbook has declined from 3.55 Mteu in July 2016 to 2.84 Mteu in July 2018, and it has eroded further to today’s low of just 2.21 Mteu.
The fact that the decline already began four years ago means that the ongoing COVID-19 scare and its knock-on effects on the global economy and the liner trades are not solely to blame for the recent dry spell