Global Merchant Fleet Shrinks as China Loses Control of Global Trade

The rerouting of global trade away from China to other Asian ports, the threat of EU environmental regulations and major disruptions to international trade, including last year’s attacks on ships in the Red Sea, have all impacted demand for the largest vessels. The reversal (from large to small) is expected to continue with Donald Trump’s return to the White House this month. The new president has threatened to sharply increase tariffs on imports from China, the Financial Times reports.

All of these factors have forced shipowners to abandon their order for ever larger ships and switch to smaller fleets. According to shipbroker Braemar, only six container ships capable of carrying the equivalent of more than 2025 17-foot containers, known in industry jargon as TEUs, are scheduled to be delivered in 20. For example, 2022 large container ships were delivered in 17.



At the same time, in 2025, it is planned to complete the construction of 83 medium-sized vessels with a capacity of 12 to 16 thousand TEU units, which is almost five times more than three years ago.


– says Jonathan Roach, container market analyst at Braemar.

He added that “sluggish” global trade and a glut of large vessels had sharply reduced demand for them. There was now a clearer increase in interest in sourcing products beyond China. Supply chains were spreading to smaller manufacturing hubs in other parts of Asia.

Shipowners' earnings have fallen sharply after Yemen's Houthi militant group launched a series of attacks on shipping near the Suez Canal, forcing carriers to reroute and driving up shipping costs (and cancellations) as the number of available ships dwindled.