Shipping lines announced their 2023 quarter three revenues a few weeks ago, and it made the news. After five quarters of decline in earnings, quarter three of 2023 saw a net income decline of 96% compared to quarter three of 2022.
Looking at incomes and revenues, one might think that the volumes shipped have dramatically decreased in the past year, but this is not true, and the infographic based on Alphaliner Top 100 / 07 Dec 2023 displays it well.
Shipping Expert John D. McCown points out that from 2016, “the container shipping industry has literally gone from being at the bottom of overall industry performance to being at the top” during the pandemic years.
With such an increase in profits, the shipping carriers have significantly invested in new ships catering to more volumes. There was an increase of 569 active ships since April 2021, when the number of active ships was 6,195, and 264 new active ships since December 2022. It is important to note that the fleet doesn’t speak much about the actual capacity increase. John D. McCown states in his article:
“Most of the ships being built are large and on average believed to be at least twice the size of the average container ship in the world fleet. Rather than a 30% increase in TEUs, its no more than a 15% increase in the number of vessels which is more the driver on costs than the number of TEUs.”
Since April 2021, there has been an increase of around 3.8 million TEUs capacity on the active ships, and that was the capacity that the current Top 1 shipping line, Mediterranean Shipping Company, had available in April 2021. MSC has since increased its capacity to 5.5 million TEU and has 1.5 million TEU on the order book.
After being surpassed by MSC in January 2022, Maersk, the current Top 2 shipping line, contained its TEU capacity to around the same levels. The status of the ordered extra capacity suggests that it will soon move to the Top 3 when CMA CGMs’ extra capacity is fulfilled.
Comparing the total volumes shipped over Trans-Atlantic, Trans-Pacific, and Feast-Europe routes in December 2022 versus December 2023, they are not that different from December 2, 2022.
There were congestions in the past years in the ports, and catering for extra vessels and TEU capacity will see some expansion in the busiest ports.
