Chen Shuai, deputy GM of Cosco Shipping Holdings, has sought to calm concerns that the overcapacity seen after the 2008 global financial crisis could be repeated, thanks to the large number of newbuildings on order.

Mr. Chen was speaking at a media briefing last week to discuss the financial position of Cosco Ship Holdings for the first nine months of 2022.

Container shipping volumes during the period fell to 18.5m teu from 20.4m teu a year earlier, but turnover rose 37% year-on-year to $44.46bn, and net profit rose 48% to $16.2bn.

“Shipping line profit margins have been better than in 2007, but the orderbook-to-fleet ratio is nowhere near the 64% seen in 2008,” Mr. Chen said.

“Many of the newbuilds to be delivered over the next two years are in the 5,000-15,000 TU range, and will be used to optimize and upgrade the fleet composition.”

A record 561 boxships were ordered last year, more than fourfold from 2020, as shipping lines braced for their highest-ever profits due to COVID-19-related logistics constraints and port congestion.

Cosco Shipping Ports, Cosco Shipping Lines and OOCL’s parent CSH have 42 vessels on order, including a dozen 24,000 teu vessels ordered by Cosco Shipping and OOCL in October this year and 20 in September and October last year . The new buildings will be delivered between 2023 and 2025.

Mr Chen said COSCO will adjust its vessel capacity according to market demand – currently, liner operators are emptying sailings in response to weak cargo volumes.

He added: “Amidst increasingly stringent environmental regulations, the scrapping of older vessels and slow steaming may impose some restrictions on effective vessel supply, and this will help maintain the fragile supply-demand balance.”

Without disclosing whether shippers had sought to renegotiate long-term shipping contracts, Mr Chen said Cosco Shipping was “communicating with contractual counterparties to comply with their wishes”.

To improve port access, Cosco Shipping Holdings will increase its stake in Shanghai International Port Group to 15.55% by the end of the year, and invest in infrastructure such as trailer platforms, warehouses and logistics parks to improve the group’s container logistics capabilities .