FOR the past two years, the container market has been preoccupied with one question: what happens when Red Sea disruption fades and the record orderbook starts hitting the water?

The conventional answer has been straightforward. More ships, shorter voyages through Suez and less capacity tied up around the Cape of Good Hope ultimately mean lower freight rates and weaker carrier earnings.

Recently, a competing argument has gained traction. As carriers begin returning to the Red Sea, some industry leaders increasingly contend that vessel supply is no longer the market’s binding constraint. The real problem, they argue, lies ashore, in congested ports, overstretched terminals and inland transport networks.

They are not wrong. But they may be overstating the extent to which congestion can offset a looming surge in supply.

Port congestion continues to absorb a meaningful share of the global containership fleet. Terminals across Asia, Europe and the Middle East remain under pressure and landside infrastructure investment continues to lag demand. Congestion is likely to remain a structural feature of container shipping for years to come.

What is less convincing is the suggestion that these bottlenecks can absorb all the capacity returning to the market.

For two years, virtually every major Asia-Europe service has been routed around the Cape of Good Hope, typically requiring several additional vessels to maintain weekly schedules. As services migrate back through Suez, many of those ships become surplus to requirements. Across roughly 40 weekly loops, the number returning to the market could be far above 100 vessels.

At the same time, the orderbook remains heavily skewed towards ultra-large tonnage. More 18,000-plus teu vessels are scheduled for delivery through 2027, creating not only direct pressure on Asia-Europe trades, but a cascading effect as displaced ships move into secondary east-west routes.

This matters because most major ports are already handling 24,000 teu vessels. Larger ships undoubtedly create sharper peaks in truck, rail and terminal demand, but they are not a new phenomenon. Congestion may worsen, yet it is unlikely to prevent a substantial increase in effective fleet capacity.

That does not mean rates will collapse overnight. Carriers have repeatedly demonstrated their ability to manage supply through blank sailings and network adjustments. Earnings are unlikely to fall off a cliff.

Richard Meade
Editor-in-chief, Lloyd’s List

Click here to view the latest Lloyd’s List Daily Briefing.