The global shipping industry is experiencing an unprecedented structural crisis. Overcapacity in shipping has reached record levels: the global orderbook has 9.6 million TEUs, equivalent to 30-35% of the active fleet. The fleet is growing at 6-7% annually, while commercial demand is advancing at only 1.7-2.6%. Spot freight rates have plummeted 25-55% year-on-year. This structural imbalance is not a purely temporary phenomenon: analysts predict oversupply until at least 2028-2029. The operational fallout extends throughout the value chain, affecting shipowners, shippers, and end customers with profound and lasting consequences.
The Fallout for Shipowners: Pressure on Margins and Consolidation
Shipowners find themselves on the front lines of crisis management. The most immediate pressure is on freight rates. The Drewry World Container Index marks a global composite of $1,933 per FEU as of February 2026, down 38-40% year-on-year. On transpacific routes, the slump is even more pronounced: Shanghai-Los Angeles lost 53%, Shanghai-New York 55%. With freight rates so compressed, operating margins are thinning dangerously. Analysts estimate sectoral losses of up to $10 billion in 2026. Carriers with gross margins below 40 percent risk significant operational difficulties.
To contain the damage, carriers take a combination of tactical measures. Blank sailings-selective cancellation of departures-artificially reduce the capacity offered. Slow steaming lowers sailing speed, absorbing capacity and cutting fuel costs. Some units are put on temporary idle, especially the least efficient ships. Industrial consolidation is advancing rapidly: agreements such as that between Zim and Hapag-Lloyd signal a trend toward concentration of power on strategic routes. However, these measures offer only partial relief: they cannot solve the structural imbalance between orders for new ships and actual demand for hold.
On the fleet front, container scrapping in 2025 hit a 20-year low. Only 12 ships for 8,172 TEU were scrapped, compared to 95,607 TEU in 2024. BIMCO estimates a “scrapping overhang” of 1.8 million TEUs, capacity that should have been retired but remained active. By 2026 an acceleration is expected: about 260,000 TEUs scrapped, an increase of 1,200 percent over 2025. However, this figure remains insufficient compared to the wave of expected deliveries. The order book is equivalent to 30-35% of the active fleet, with a peak of 3.3 million TEUs being delivered in 2028 alone. The introduction of the 100% EU ETS from January 2026 adds permanent structural costs on European routes, further worsening the economic situation of operators.
Shippers Balanced Between Rates and Service Reliability
International shippers find themselves in a paradoxical position. On the one hand, declining freight rates offer opportunities to renegotiate contracts on more favorable terms. Xeneta forecasts a further 25 percent decline for global average spot freight rates in 2026 and 10 percent for long-term contracts. For those handling regular volumes, this represents a real opportunity to reduce freight costs. However, the opposite side of the coin is deteriorating operational reliability. Carriers are resorting to blank sailings on a massive scale, continually altering departure schedules on Asia-Europe and Transpacific routes.
Capacity management by shipping lines introduces elements of uncertainty that complicate logistics planning. Cargo booked on a service may be “rolled over”-delayed to a later departure-without adequate notice. Transsshipment hubs are reconfigured, alliances redesign routes, and transit times become less predictable. For shippers operating on time-sensitive supply chains, such as food or pharmaceuticals, these variabilities come at a real cost: delivery delays, stock breaks, contractual penalties.
A further destabilizing element is the possible reopening of the Suez Canal. Since late 2023, detour via the Cape of Good Hope have taken up about 9 percent of global container capacity, lengthening transit times. A full return to the Suez would free up about 6% of capacity, reducing transit times and multiplying blank sailings to compensate. Shippers need to monitor the geopolitical dynamics of the Red Sea. Normalization of the route would have immediate impacts on service availability and negotiated rates. In this scenario, building strong relationships with multiple carriers – diversification of the carrier mix – becomes a key strategic lever to ensure business continuity.
End Customers: Negotiating Opportunities and New Risks
2026 is shaping up to be a favorable year for shippers-importers and exporters-on the transportation cost front. Overcapacity in shipping shifts bargaining power toward demand. Shippers now have the opportunity to obtain long-term contracts on better terms than in the years 2021-2023. In a market where supply structurally exceeds demand, carriers are willing to offer competitive prices in order to secure cargo. Those who have not yet revised their multi-year contracts should do so urgently. The window of opportunity will not remain open for long.
However, the risks to end customers are not negligible. Operational volatility – produced by blank sailings, slow steaming and frequent route changes – results in unpredictable transit times. For industries such as FMCG, automotive, or electronics, supply chain predictability has direct economic value. A two-week delay on a shipment of components can bring a production line to a halt or empty a shelf during peak periods. Diversifying transportation suppliers and building larger inventory buffers are strategic responses to this increasing volatility.
Another relevant variable for end customers is the effect of U.S. tariffs and the regionalization of supply chains. New geopolitical balances are reshaping trade flows: some routes are shortening, others are lengthening, with direct impacts on overall transportation costs. The EU ETS, applied 100% on ships calling European ports from 2026, introduces an environmental surcharge that carriers pass on to customers. End customers must assess the entire basket of ancillary costs: BAF, ETS surcharge and terminal handling charge. Looking only at the nominal freight rate can lead to poor choices.
Adaptation Strategies: How to Respond to the Crisis
The industry is already reacting to the crisis, with differentiated responses depending on the role in the supply chain. For shipowners, the priority is cash management and fleet optimization. Carrier alliances-such as Ocean Alliance and THE Alliance-are coordinating capacity management to avoid uncoordinated oversupply. Carriers are accelerating fleet renewal toward more energy-efficient ships. Increasing penalization of ships with worse CII is driving early scrapping of the most polluting units. The dry bulk segment also shows stronger fundamentals than containers: the order book is equivalent to only 7 percent of the fleet. Demand for raw materials – iron ore, bauxite, soybeans – offers structural support.
For shippers, the most effective response is through building diversified relationships with carriers. Relying on a single carrier in such a volatile market is a high operational risk. Investing in supply chain visibility systems – real-time tracking platforms – enables early detection of operational disruption and activation of alternative plans. Negotiating contracts with flexibility clauses-the ability to change volumes or routes-becomes a strategic priority. Some sectoral routes, such as Ro-Ro and PCTC, show similar dynamics to containers. Some 58 new ships are scheduled for delivery in 2026, with capacity growth of 5-7 percent. Again, carrier choice based on price alone can be counterproductive.
For end customers, the key word is resilience. Building more flexible supply chains-with alternative suppliers, calibrated inventory buffers, and diversified transportation contracts-reduces exposure to operational discontinuities. Transportation Total Cost of Ownership includes surcharges, transit time and delay risks. This calculation is more useful than just comparing nominal freight rates. Advisory practitioners in international trade can support contract optimization and selection of the most reliable carriers.
Conclusions
Overcapacity in shipping is likely to persist until at least 2028-2029. Braemar analysts estimate an average oversupply of 27 percent over the period. None of the tactical measures taken by carriers – blank sailings, slow steaming, accelerated scrapping – can reabsorb a 9.6 million TEU order book. In this structurally complex scenario, adaptability becomes the key competitive factor. Shipowners must focus on energy efficiency and consolidation. Shippers must build diversified relationships and advanced visibility systems. End customers must take a proactive approach to managing transportation contracts. Market opportunities must be seized without ignoring operational risks. In an era of increasing complexity, specialized advisory becomes a strategic asset to successfully navigate this phase of the maritime cycle.
