“Assuming a significant increase in recycling of older ships and a reduction in average sailing speeds, we forecast that average market conditions in 2026 will be like those in 2025 but 2027 could see slightly weaker market conditions. We forecast ship demand growth of 2.5%-3.5% in both 2026 and 2027 while supply is estimated to grow 3% in 2026 and 3.5% in 2027,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.

The return to normal Red Sea and Suez Canal routings in the not-too-distant future, however, seems increasingly likely, which could result in a 10% reduction in ship demand. Starting in January, CMA CGM’s INDAMEX service will fully return to the Suez Canal while the MEX service will use the Suez Canal on the back-haul leg from Europe to Asia. If these changes are successful, other carriers may slowly begin to change services back to the Suez Canal.

North American import container volumes are expected to contract 3% in 2025. We also expect to see negative growth rates in the first half of 2026 before the market returns to growth in the second half of the year. We forecast that North America import container volumes will grow 2% during both 2026 and 2027.

“However, up to 70% of US economic growth in 2025 may be driven by AI investments and the wealth effects of AI share price increases. Should the AI bubble burst, it could significantly hurt the US economy with spillover consequences for the world economy and container ship demand growth,” says Rasmussen.

We have included recycling of 750k TEU capacity in our supply forecast for 2026-2027. We estimate that a recycling overhang of 1.8m TEU exists due to recycling during the past five years reaching only 272k TEU. If recycling ends lower than our forecast, we expect that the shortfall will add to oversupply of capacity in the market.

Despite increased port congestion, capacity-weighted average sailing speed has year-to-date 2025 fallen to 14.7 knots from 14.8 knots in 2024. Speeds, however, remain elevated compared to the 14.4 knots in 2023. As more ships are delivered, we expect that carriers will slow ships down and have included a 0.25 speed reduction in both 2026 and 2027 in our estimate. Should that not happen, supply could grow 1.2 pp faster during both years.

“While our forecast indicates mostly stable market conditions, several uncertainties remain. In particular, the possibility of a return to Suez Canal routings looms large over the market outlook. As other supply and demand risks also exist, the coming two years could thus end more eventful than our headline forecast suggests,” says Rasmussen.

Supply forecast
We estimate that supply will grow 6.0% in 2025 while forecasting growth of 3.0% in 2026 and 3.5% in 2027. Our supply growth estimate for 2025 has been reduced compared to our previous report as congestion has remained higher than we expected while sailing speeds have been lower.

Shipowners have continued to place new orders for ships and contracting volumes for 2025 are on pace to match or possibly exceed the all-time high of 4.7m TEU in 2024. The order book has grown to a new record high of 10.9m TEU, equal to a 33.2% order book to fleet ratio. Considering the current market imbalance and the expectations for higher newbuilding deliveries, we expect recycling of older ships to increase in 2026 and 2027 thereby reducing the estimated recycling overhang of 1.8m TEU. Ships smaller than 3k TEU are expected to dominate recycling as they make up 85% of ships 25 years old or older and 52% of the capacity in that age category. On the other hand, ships smaller than 3k TEU make up only 27% of the ships on order, equal to 4% of the total capacity on order.

Capacity in the smallest size segments is therefore expected to contract whereas other segments will see an increase in capacity. Combined, the two largest segments, 12-17k TEU and 17-24k TEU, are forecast to grow 20% between the end of 2025 and end of 2027.

Average sailing speed is forecast to reduce by 0.25 knots in both 2026 and 2027 as liner operators attempt to avoid further excess supply in the market. Capacity-weighted average sailing speed has averaged 14.8 knots in 2024 and 14.7 knots in 2025, significantly higher than the 14.4 in 2023. Our forecast predicts capacity weighted average sailing speeds of 14.5 and 14.2 knots in 2026 and 2027 respectively. If the sailing speeds do not reduce, supply growth could end 1.2 pp higher during both years than included in our forecast.

Year-to-date in 2025, the share of the fleet in or outside ports has on average been 1 pp higher than in 2024. Chinese ports in particular have seen an increase in ships operating in port or waiting to be operated. We see no immediate signs of a decrease in the percentage of ships in or outside ports and have therefore maintained the current levels in our forecast.
Source: BIMCO