Container shipping lines are under pressure to accelerate scrapping of older vessels as new capacity floods the market, threatening profitability, reported London’s S&P Global.
Maersk, Ocean Network Express, Hapag-Lloyd and HMM have all reported losses or steep profit declines as oversupply weighs on rates. More than one million TEU of new capacity is due this year, followed by 2.3 million TEU in 2027 and 3.4 million TEU in 2028, according to Sea-web.
Despite the influx, scrapping remains negligible. Drewry said just 6,000 TEU was scrapped in 2025, while Alphaliner put the figure at 8,172 TEU, the lowest in 20 years. Bimco estimates 500 ships of 20 years or older, totalling 1.8 million TEU, are overdue for recycling.
Maersk warned overcapacity could reach eight per cent this year and forecast a potential US$1.5 billion operating loss, its first in a decade. Chief executive Vincent Clerc said scrapping levels would determine whether the carrier meets the upper or lower end of its guidance.
Alphaliner expects recycling to pick up in the second half of 2026 if carriers return to the Suez Canal, but warned scrapping could be deferred until 2027-28 when massive new deliveries arrive. Drewry said over-ordering and limited demolitions have become entrenched industry habits.
Carriers are managing capacity through blank sailings and slow steaming, but Drewry cautioned that without higher scrapping levels, further speed reductions may be needed. Container shipping on east-west trades is now a buyers’ market, though consultants warned carriers will not allow conditions to drift against them without response.
