Analysis of Supply-Demand Structure and Investment Value of the Container Shipping Industry in 2026

The container shipping industry in 2026 is in a window period of “simultaneous congestion and scarcity”: order backlogs and new vessel delivery volumes both hit record highs, which seemingly constitute a potential supply shock; however, due to the existence of three major “effective capacity black holes”—geopolitics, environmental compliance, and vessel age retirement—the actual available capacity that will be put into use in the short to medium term will still be compressed. As long as the freight rate recovery to previous high cycles has not fully materialized, leading companies with cost control and ecological synergy still have the probability of navigating the cycle. From the asset side, leading companies such as COSCO SHIPPING Holdings currently have historically low valuations, providing an opportunity to gain sustainable free cash flow recovery at a low cost.

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1. Supply Side
   : By the end of 2025, global container ship orders had exceeded 10.9 million TEU (accounting for 33.2% of the existing fleet), and the latest data shows that order backlogs even reached 11.61 million TEU, equivalent to 34.8% of the existing fleet[1][2]. New ship deliveries in 2026 are expected to be about 1.7 million TEU, with a year-on-year growth rate still around 3%. Although the nominal growth rate has fallen to around 3% compared to 2025, the net increase after “delivery + retirement” is still significantly higher than the demand growth rate. Coupled with the fact that new ships are mostly large low-consumption types (12K-24K TEU), high load rates will continue to compress market elasticity in the next two years[1].
2. Demand Side
   : From 2024 to 2026, the growth rate of global merchandise trade will slow down year by year (the 2026 forecast is only 0.4%). The global container throughput growth rate in the first 10 months of 2025 was only 4.4%, significantly lower than the post-pandemic peak, and demand for Asia-Europe and US-bound routes even showed negative growth; Sino-US economic and trade frictions and global tariff pressures continue to reshape the transportation pattern, making cargo volume growth highly dependent on regional allocation rather than “balanced” expansion[1]. As a result, the growth rate of “ton-miles” is lower than that of “cargo volume”, indicating that shorter voyages and structural capacity mismatch have become the norm.

Comprehensive analysis shows that although shipowners have sufficient orders, the final release path of new capacity still needs to bypass the three major black holes. The industry has reason to remain cautiously optimistic but cannot ignore supply-side pressure.

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1. Geopolitical Frictions (Red Sea/Suez)
   • The Red Sea/Suez Canal crisis has forced about 7%-9% of effective supply to detour around the Cape of Good Hope, increasing route duration and fuel costs. The EU carbon tax has also included part of the additional emissions from these detours into costs, resulting in a decline in actual available capacity. Multiple shipping giants have only conducted sporadic trial voyages while the situation remains fragile, and insurance rates remain high; full resumption of navigation still requires more time[4].
   • If the Suez Canal resumes navigation in 2026, it will be a “sudden shock” to supply release, but in the short term, port congestion, scheduling responses, and shippers’ rebalancing of safety will exacerbate freight rate fluctuations rather than immediately easing the pressure[3][4].
2. Environmental Regulations and Speed Limits (CII/EEXI)
   • The IMO Carbon Intensity Indicator (CII) and Energy Efficiency Existing Ship Index (EEXI) have prompted shipowners to actively slow down to maintain ratings, and to complete compliance targets by scrapping high-emission old ships. Slowing down has caused the effective transport volume of the same fleet to drop again, and the transformation to green ratings and fuel transition also requires at least several years of construction period[4].
3. Old Vessel Retirement and Slowdown (Scrapping + Slow Sailing)
   • BIMCO/industry forecasts indicate that about 1.8 million TEU of old ships will be scrapped in 2026-2027, and the scrapped types are concentrated below 3,000 TEU, accounting for 85% of the number of ships aged 25 years and above. At the same time, the industry plans to reduce the average sailing speed from 14.7 knots in 2025 to 14.5 knots in 2026 (even 14.2 knots in 2027). While delivering high-capacity new ships, it maintains supply prudence through slow sailing, which means the gap between nominal capacity and effective capacity will further widen[1].

These three black holes are not “permanent barriers”, but they are sufficient to delay the actual capacity entering the market during the supply peak, so that freight rates still have phased support. If these factors recede in an orderly manner (such as controllable after the resumption of Red Sea navigation, CII/EEXI and slowdown hedging, completion of old ship scrapping), supply pressure will quickly emerge, and layout in advance is needed.

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1. Leading Companies Have Low Valuation Midpoints
   • Taking COSCO SHIPPING Holdings as an example, the current Hong Kong stock price is about HK$13.93, with a TTM P/E ratio of only 4.00x (P/B 1.01x, ROE 16.14%), and the free cash flow return is significant[0]. Such large state-owned enterprises benefit from ship-shore resource synergy, alliance agreements, and strong regulatory support, and have good “debt and cash” resilience at the end of the industry cycle, making them suitable as defensive allocations.
2. Allocation Recommendations
   • First Choice
     : State-owned/quasi-state-owned enterprises with alternating old and new ships, investment in efficient green fleets, and valuations below historical medians (such as COSCO SHIPPING Holdings, OOCL). Their cash flow and dividend strategies (such as annual cash dividends accounting for 30%-50% of net profit) are still attractive after freight rate recovery.
   • Prudent Attention
     : Private shipping companies with rapid expansion, poor financial report transparency, or high leverage. Currently, all parties in the industry are still “cutting prices while expanding”; against the background of high financing costs, small shipowners have greater profit volatility.
   • Strategy
     : Adopt a “value + growth” portfolio: hold leading companies with reasonable valuations, match with companies that have green fleets, alliance networks, and non-shipping businesses (logistics/ports), and use dividends/re repurchases to resist freight rate fluctuations.

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1. Full Resumption of Red Sea Navigation and Sudden Capacity Increase
   : If the Red Sea and Suez resume in the second half of 2026, short-term effective capacity will be significantly released; close attention should be paid to the progress of alliance resumption and the trend of insurance rates[3][4].
2. Downward Global Trade Growth
   : The 2026 merchandise trade is expected to grow by only 0.4%; if demand is lower than expected again, freight rates will be difficult to recover quickly even if supply is limited[1].
3. Order Fulfillment and New Vessel Delivery Rhythm
   : Daily delivery volume needs to be confirmed by Clarksons/shipyard delivery plans to grasp the supply peak in advance.
4. Environmental Compliance Fines or Rating Failures
   : Failure to meet CII standards will directly affect route permits and financing terms; attention should be paid to green rating disclosure and transformation budget progress[4].

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[0] Jinling AI Brokerage API Data (COSCO SHIPPING Holdings Co., Ltd. Real-time Quotes and Company Overview)
[1] “When Will Ships Return to the Suez Canal to Dominate the Future Expectations of the Container Shipping Market”, Eworldship, https://www.eworldship.com/html/2025/container_market_1223/217363.html
[2] “The Fiercest Ship Order Boom in History Triggers Concerns About Overcapacity!”, Marine Circle Focus, http://www.hyqfocus.com/jsp/model.jsp?id=38790&modelType=1
[3] “The Suez Canal Reopening Is a 2026 Gift for Commodities”, Bloomberg Opinion, https://www.bloomberg.com/opinion/articles/2025-12-16/the-suez-canal-reopening-is-a-2026-gift-for-commodities
[4] “Will Shipping Companies Resume Red Sea Navigation? Beware of Three Major ‘Hidden Reefs’”, Shipping Information Network, https://news.csi.com.cn/225933b3-eec3-45cf-906b-366a93347a23.html