The container shipping industry dodged a potential overcapacity crisis in 2024, thanks to an unexpected savior: the Red Sea crisis that forced vessels to take longer routes around Africa’s Cape of Good Hope.
The global container fleet expanded significantly in 2024, growing by 10.6% and adding nearly 3 million TEU of capacity, according Alphaliner. However, rather than flooding the market with excess capacity as many feared, these additional vessels were largely absorbed by the Asia-Europe trade route, where ships were forced to divert around the Cape of Good Hope to avoid dangerous Red Sea passages.
In its weekly email, Alphaliner highlighted the substantial impact of these diversions, with the Asia-Europe trade absorbing 1.76 million TEU, representing 59% of the total fleet growth. The extended voyage times around the Cape effectively soaked up what could have been surplus capacity, leading to remarkably low idle tonnage rates. By year’s end, just 0.6% of the global container fleet remained commercially inactive.
“The year 2024 will be remembered in liner shipping circles as the (first) year of the Red Sea crisis, just as 2021 and 2022 are now commonly referred to as the lucrative COVID-19 years,” Alphaliner noted.
While fleet capacity on the Asia-Europe route grew by 31% over the year, the actual weekly capacity offered on the route increased by just 8.8%between December 2023 and December 2024, demonstrating how the longer Cape routes consumed the additional capacity.
Despite the delivery of new vessels and continued fleet growth, with some carriers still awaiting additional newbuildings, the industry has maintained a remarkably balanced capacity situation, defying earlier predictions of oversupply.