Container shipping faces growing overcapacity in 2027 and 2028 as new vessel deliveries and an anticipated return to Suez Canal transits increase available capacity, putting downward pressure on freight rates, according to maritime consultancy Drewry.
Speaking during the consultancy’s container shipping market outlook webinar on October 26, Senior Manager: Container Research Simon Heaney said fleet growth is projected to reach 8.8% in 2027, 12.1% in 2028 and 10% in 2029.
Drewry expects container freight contract rates to decline in 2027 as capacity expands although the timing and extent of the reductions remain uncertain.
“The sheer volume of new ships that are arriving is going to mean that disruptive factors will have a diminishing impact,” Heaney said. “But the scale of the anticipated overcapacity still remains uncertain.”
Drewry estimated that new vessel deliveries would add approximately 2.3 million twenty-foot equivalent units (TEUs) to effective capacity in 2027. A return to Suez Canal transits could release another 1.6 million TEUs of capacity currently absorbed by longer voyages around the Cape of Good Hope.
These increases are expected to outweigh measures that absorb or remove capacity, including vessel idling, scrapping and slower steaming, as well as the effects of declining productivity.
Heaney said a phased return to Suez Canal transits has already begun. Drewry expects traffic to recover to about 80% of pre-diversion levels by February 2027 although carriers are likely to retain the flexibility to re-route vessels if security conditions deteriorate.
Shipping lines are considering more than voyage costs when deciding to resume Red Sea transits, he said. Vessel utilisation, shorter transit times, network reliability and competitive positioning also influence their decisions.
Carriers maintained high vessel utilisation despite market volatility, said Philip Damas, Managing Director and Head of Drewry Supply Chain Advisors. However, this will become harder as seasonal cargo demand weakens and additional capacity enters the market.
Despite the expected increase in shipping capacity, Drewry warned that port congestion is unlikely to improve in 2027 with disruptions capable of rapidly placing pressure on port operations.
