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March Marks Turnaround For Container Sector With Record High 45 ULCS Ship Orders

March Marks Turnaround For Container Sector With Record High 45 ULCS Ship Orders

In March, orders for 45 Ultra-large containerships (ULCS, 15,000+ TEU) were placed, breaking a record on its own.

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In March, orders for 45 Ultra-large containerships (ULCS, 15,000+ TEU) were placed, breaking a record on its own. Adding to this; 27 orders for ‘smaller’ sized ships were placed in the same month, bringing the total order capacity to 866,060 TEU and marking a real turnaround for the container shipping sector.

The turnaround for the container shipping sector offers a glimpse of the level of confidence currently seen in the business on behalf of owners as well as investors. In all of 2020, a total 995,000 TEU of container shipping capacity was ordered. Capacity ordered in the first quarter of 2021 has already reached 1,398,000 TEU, a six-year-high compared to previous full years.

“The industry is keen on benefitting from the economies of scale that ultra-large containerships have to offer if you carry payloads close to its cargo carrying capacity,” says Peter Sand, BIMCO’s Chief Shipping Analyst.  

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It is ‘Upside Down’ for orders placed in 2021

In October and December last year, orders placed were almost exclusively for ships with a maximum capacity of 23,000-24,000 TEU, with only four out 23 orders for ULCS outside that range.

So far in 2021, only 4 out of 81 orders for ships with a capacity of at least 11,800 TEU were larger than 15,500 TEU.

“The mammoth size of some containerships was questioned many times during the recent six days of Suez Canal blockage, as some saw it as an omen of ships becoming too large, compromising supply chain reliability, navigational excellence and safety,” Sand says.

“But as I said at the time; you should not expect much change on that account, as Ultra-Large containerships are the preferred choice of ‘weapon’ in the arms race of the container shipping industry seeking to improve long-term profitability.”

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