Growth in the global pool of shipping containers is picking up pace on rising trade prospects and slowing box productivity as disruption in the Red Sea and Panama Canal lengthen voyage transit times, according to the latest analysis from Drewry.

"Drewry estimates that the global box fleet rose one percent last year to 51.4 MTEU as a pickup in newbuild output in the final months of the year boosted inventories that had hitherto registered declines. And for 2024, it has upgraded its fleet projection with the expectation that the global pool will expand a further 2.3 percent over the year."

With containers spending longer on ships and taking more time to complete their journeys, sales into the secondary market have slowed and the stock of empty containers, especially in depots and factory yards in China, have been largely eroded, the update added.

"Once again, the liner shipping industry’s vulnerabilities and those of its customers have been exposed by geopolitical events and operational constraints, this time on two of its main arteries. In January, the number of containership transits around the Cape had risen to 605, up from 164 a year ago, while the number of voyages through the Suez Canal over the same period declined to 62 compared to 328 in January 2023, according to Drewry’s AIS analytics. Voyage delays arising from a Cape diversion range from 10 days for vessels heading to Northern European ports such as Rotterdam to 15 days for Mediterranean ports such as Genoa.

"In the case of the Panama Canal, which mainly affects the trade between Asia and the U.S. East Coast, ocean carriers are using various options including discharge at U.S. West Coast ports and intermodal services to the East Coast, land-bridging via the Panama Canal railway and sailings from Asia via the Cape of Good Hope. While the impact of disruption in the Panama Canal is not proving to be as significant as that of the Suez Canal, it is estimated that between six-and-seven million TEU have been affected by the two incidents."

Drewry projects that ocean carrier’s box-to-slot ratios will increase in the short term as buffer stocks of equipment are increased to cope with the current supply chain challenges.

Read Full Article