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The supply/demand balance in the global fleet may have experienced the fastest growth since 2010, but it still tightened this year
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Ship demand increased as 90% of the capacity that usually transits the Suez Canal has instead been sailing the Cape of Good Hope
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Cargo volumes are seen to hike ship demand by 22% between 2019 and 2026
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Freight rates “could fall slightly from current levels in 2025 but fall quite significantly in 2026,” according to BIMCO
BIMCO sees a “slight weakening” of global fleet supply/demand in 2025 and a “significant weakening” in 2026 with ship demand expected to drop, according to its latest Container Shipping Market Overview and Outlook.
This is based on the changed assumption for when ships will be able to transit Suez Canal again. “We now assume that reroutings will continue to impact all of 2025, and that ships will be able to return to normal routings throughout 2026.”
Major shipping lines avoid transiting the Suez Canal due to Houthi-led attacks on cargo ships. An Iranian-backed rebel group, the Houthis are against Israel and its activities on the Gaza Strip.
If, however, ships are able to return to the Suez Canal next year, a “significant weakening of market conditions” may be expected and then a “slight improvement in 2026,” said the Market Overview.
But if ships are still unable to return to normal routings in 2026, the “slight weakening of supply/demand balance” next year is seen to be followed by a “slight tightening of the balance in 2026,” the report added.
For the year that is about to end, the supply/demand balance in the global fleet tightened, with ship demand increasing as 90% of the capacity that usually transits the Suez Canal has instead been sailing the Cape of Good Hope, substantially hiking both average sailing distance and ship demand, according to the Market Overview.
Fleet expansion remains a concern once ships return to normal routings. BIMCO estimates that fleet growth will increase supply in 2026 by 46% compared to 2019 before the contracting boom started.
Cargo volumes are seen to hike ship demand by 22% from 2019 to 2026.
According to Market Overview, “Even though we expect that average sailing speeds will continue to decline and reduce supply, growth forecasts still point to the supply/demand being weaker than in 2019 once ships can return to normal Suez Canal routings; 2019 was a year when freight rates were much lower than have been the case in recent years.”
After the very weak growth experienced in 2023, estimates are that cargo volumes will grow between 5.5% and 6.5%, and forecast growth for 2025 is between 3% and 4%, then 3.5% and 4.5% in 2026.
The fastest import volumes will be between South and West Asia, as well as South and Central America.
The International Monetary Fund expects faster economic growth for many oil exporting countries in West Asia, which should help lift volumes to the area. In South America, Argentina is seen to emerge from recession, which should drive volumes to the area higher.
As for freight rates, BIMCO’s forecasted supply/demand development indicate they “could fall slightly from current levels in 2025 but fall quite significantly in 2026.”
This, after spot freight rates for Shanghai exports and average freight rates for Chinese exports have so far on average been respectively 148% and 64% higher than 2023. The rates increased from April to July but then fell from July to October as supply grew and markets exited the peak season. Since October, the averages have been mostly stable as rates to Europe & Mediterranean have climbed while rates to North America have fallen.
READ: Disruptions still key demand driver in container shipping market
