Container freight rates continue to slip with Asia-Europe rates suffering the biggest drops last week. Cargo demand continues to fall, forcing carriers to offer rate discounts. The weakness has spread to the transpacific where carriers are also offering selective bullet rates and voyage-specific discounts. Carriers are pushing for a mid-September rate hike on hopes of a mini-cargo rush ahead of the Golden Week holidays in China and higher volumes on the US West Coast routes ahead of potential strikes at the US East Coast on 1 October.
The weakening market has not deterred carriers from pushing ahead with their new ship orders, with total orders in August reaching a record high of 1.4m teu, surpassing the previous record of 1.07m teu ordered in March 2021. More orders are still to come with carriers heading for a new capacity war.
Linerlytica
Containership newbuilding orders hit new high in August
Carriers are rushing to secure ship contracts despite rising newbuilding prices and growing concerns over over-capacity by the time these ships hit the water in 2027-2029. COSCO is the latest carrier to join in the new order frenzy with a fresh order revealed last week for 12 units of 13,700 teu at its COSCO Yangzhou shipyard for delivery over 2027-2029 bringing the total capacity contracted in August to a record high of over 1.4m teu, including several Letters of Intent (LOIs) that are expected to turn into firm orders including several fresh orders from Maersk for LNG dual fuel units that will mark yet another policy shift for the Danish carrier. The global containership orderbook has risen to 25.3% with more orders still due to be concluded in the coming months including a 30 ship order from Hapag-Lloyd that will mark the largest order ever made by the German carrier.
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