Looking slightly further ahead, a significant injection of new capacity is on the horizon. Looking exclusively at the orderbook, this equals a 10% capacity injection in 2023 and another 10% in 2024. However, this is likely to be tempered by three different impacts: Firstly, there will be scrapping. There has been virtually no scrapping in the past two years, and hence a couple of percent of capacity is likely to be removed on this account. Secondly, we might see some slower sailing speeds. There are arguments in the market that vessels are already going as slow as they can. But – perhaps unscientifically – it should be noted that the argument that ’ships cannot go slower’ has been repeated quite a few times in the past 20 years only to be proven wrong when carriers have had to address overcapacity issues. Thirdly, vessel sizes stand to grow further. Not so much in Asia-Europe, but certainly in other deep-sea trades. When vessel sizes grow, each vessel has to spend more time in port for load and unload operations. This leads to a situation where more vessels are needed to maintain a weekly sailing schedule, and as such this will also absorb some of the additional capacity. But even with these three impacts, the market does face an injection of capacity likely to exceed demand in 2023 and 2024, but the impact might not be as calamitous as it would appear at first glance. DSV – Global Transport and Logistics At DSV, we keep supply chains flowing in a world of change. We provide and manage supply chain solutions for thousands of companies every day – from the small family-run business to the large global corporation. Our reach is global, yet our presence is local and close to our customers. More than 75,000 employees in over 80 countries work passionately to deliver great customer experiences and high-quality services. We aspire to lead the way towards a more sustainable future for our industry and are committed to trading on nature’s terms. DSV is a dynamic organisation that fosters inclusivity and diversity. We conduct our business with integrity, respecting different cultures and the dignity and rights of individuals. Visit dsv.com and follow us on LinkedIn, Facebook and Twitter.
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