Shipyard slots stretch to 3.7 years as orders outpace output

By Tom Whitfield

Shipyards had sold 3.7 years of production capacity in Danish Ship Finance's latest Shipping Market Review, more than double the 1.4 years recorded in 2020, as orders across all vessel types continued to outpace deliveries.

That wait is the commercial constraint. A prospective owner now faces a thin pool of uncommitted yard slots, while the concentration of orders among leading Chinese and South Korean builders makes delivery timing more important than the headline newbuilding price.

A concentrated orderbook

Since 2024, first-tier yards have taken more of the orders than second-tier yards, with South Korea and China winning most business. The number of yards carrying at least 10,000 dwt on order rose 30% to 277.

Second-tier yards formed the buffer for owners willing to order outside the leading group. Their share of capacity able to accept new orders fell from 62% to 14%. Japan's tier-two capacity reached 3.8 million cgt, surpassing China's 3.3 million cgt.

As tier-one production filled, newbuilding prices rose to within 3% of their 2008 high by 2024. Prices have held steady since, but the stable headline price does not mean broad slot availability has returned.

Delays are already material

DSF expects second-tier yards' scheduled deliveries to equal 43% of capacity in 2027 and 19% in 2028. Tier-one yards will see delivery workloads rise to 119% and 130% in 2027 and 2028 respectively.

By the end of 2028, 87% of tier-two yards will have run out of contracts, against 45% of tier-one yards. DSF calls this a second-tier cliff, a sharper constraint for owners able to use smaller or less concentrated yards.

The risk extends beyond the yard hierarchy. Some 20% of orders by cgt arrive after their scheduled delivery year. Most late vessels reach buyers by June of the following year, while 5% to 7% are never delivered.

DSF said: “The yards have sold more than they have delivered every year since 2021 – 1.6 times as much in the past 12 months. Two–fifths of the orderbook’s growth are Container ships, four–fifths have gone to Chinese yards, and the 99 top–performing yards took 81% of last year’s orders.”

Orders keep accelerating

The global orderbook stood at 210 million cgt, and 38% of it was contracted during the previous 12 months. Since 2020, annual order additions have run 16 million to 29 million cgt higher through 2025.

In the first nine months of the year covered by the review, orders rose by another 45 million cgt. That acceleration kept pressure on already sold-out tier-one production capacity.

The top of the market has tightened in parallel. Tier-one shipbuilding capacity more than tripled during the decade, China's capacity doubled, and South Korean and Japanese capacity declined.

Capacity will not arrive together

DSF's segment data show where the fleet pressure will sit:

• Container ships make up 17% of the global fleet but have 68 million cgt on order, equal to 32% of the total orderbook.
• Dry bulk has the largest operational fleet. Its 35 million cgt on order equals 13% of the fleet.
• Crude oil tankers have 21% of 82 million cgt on order.
• LNG carriers have 26% of 75 million cgt on order.

The delivery calendar is even more concentrated than the headline totals. DSF said: “The 99 top performers are scheduled for 1.64 times their capacity in 2028 and 1.41 in 2027. They are carrying 70% of 2027's tonnage and 77% of 2028's.”

Peak supply for each vessel segment will not arrive at the same time. Gas tanker deliveries are due to peak next year, while container carriers and crude oil tankers peak in 2028. Container ships will receive 25.6 million cgt in 2028, equal to 13% of the fleet in one year; deliveries over 2027-29 equal 32% of the fleet. DSF also puts the 2028-only fleet addition at 11%.

What does this change for shipowners, carriers and forwarders?

For shipowners, the change is schedule certainty. One in five orders by cgt arrives late, and most late ships only land by June of the following year. Owners waiting for capacity need a schedule buffer rather than relying on a nominal delivery year.

For carriers and freight shippers, the segment calendar matters more than the 210 million cgt orderbook alone. Gas tanker supply peaks first; container and crude tanker capacity then concentrates in 2028. The data do not support a standalone freight-rate forecast, but they identify where a large tranche of new capacity can hit charter and cargo markets.

For forwarders, the practical distinction is between an announced delivery and a delivered vessel. The tier-two cliff, the 20% late-delivery rate by cgt and the concentration of orders at 99 top-performing yards make a supplier's promised slot less reliable than a confirmed handover.

Unless yard output catches up with orders, the orderbook points to scarce delivery slots through the late 2020s, with 2028 carrying the sharpest container and crude-tanker supply surge and late arrivals remaining a central schedule risk.