Shipping investors in recent months have been suffering from a severe attack of the jitters. Global orders for most types of merchant ship newbuildings have plummeted after an upsurge last year. Currently there are few signs of a pick-up in the months ahead and some indications point to an extended pause.

A notable exception to the downturn in the first five months of 2025 is container ship orders. These have held up, especially for the larger size vessels. By contrast ordering activity for bulk carriers and gas carriers was greatly reduced while, for tankers, a much weaker pattern unfolded.

Orders for new merchant ships placed in shipbuilding yards around the world during the January to May period of this year totalled 35.3 million deadweight tonnes (515 ships), according to provisional estimates by Clarksons Research. This volume is less than a fifth of the 189.8m dwt total recorded during 2024 as a whole, a dramatic slowing of the trend.

Slowing and faltering

Container ship orders appeared to be slackening somewhat while maintaining a relatively robust pace. As expressed in the common measurement of deadweight capacity, ordering in this category amounted to just over 19m dwt in this year’s first five months, after reaching an annual 51m in 2024. Over the past several years container service operators have been energetically taking steps to expand fleets.

In a starkly contrasting change of pace, bulk carrier orders in the first five months totalled 57 ships of under 5m dwt, less than 10% of the 55m dwt placed last year. Based on almost any comparison this figure is depressed, apparently indicating an emerging mood of greater caution about future prospects.

Gas carrier newbuilding orders also diminished greatly. After experiencing higher levels of contracting in recent years and totalling 15.3m dwt in 2024 as a whole, the total fell to 1.4m dwt in the January-May 2025 period. Much lower orders for both LNG and LPG carriers were recorded.

Reduced tanker ordering is another notable feature of the Clarksons Research data. In the past two years there was a strong recovery of newbuilding interest, resulting in 2024 orders reaching 61m dwt (803 vessels), the highest level since eighteen years earlier in 2006. During the current year’s first five months enthusiasm faded and the total was under 9m dwt.

Among more specialised merchant ship types where ordering has slowed this year is car carriers. These have been ordered in large numbers and are now boosting capacity in this relatively small fleet.

What are the implications?

Fleet capacity in all the main vessel categories is either accelerating or continuing to expand briskly. Growth reflects past ordering patterns coupled with an ongoing trend of extremely low scrapping of older or uneconomical vessels. Reduced ordering this year, assuming the pattern persists, will mainly affect fleet growth in the late 2020s.

Among explanations for the downturn in orders during 2025 so far is the extent of newbuilding orderbooks as a result of previous activity. Global newbuilding orderbooks reached 386m dwt at the end of last year (equivalent to 16% of the existing fleet), the highest since end-2013. The latest calculations indicate that at the end of May this year the total was similar.

Shipyards’ capacity for building some types of vessel especially is evidently fully absorbed. Numerous orders for more sophisticated and therefore more expensive tonnage – container ships and gas carriers – have to a large extent filled building berths available to construct these vessels. Such orders are often more attractive to shipyards than those for more basic ship types which, nevertheless, have been placed in large numbers.

As building slots were reserved, available capacity for further newbuilding deliveries tightened. With limited delivery availability before 2028, owners are now required to look ahead beyond the usual two or three years contract lead time when delivery can be arranged, to envisage up to four or more years. This stretched delivery profile appears to be acting as a deterrent to some investors.

Elevated prices quoted for new ship orders are also seen as a discouraging factor, although these are reportedly now easing while remaining relatively high. Two other, albeit not entirely new, influences seemed to be exerting increased restraining pressure on investors’ decisions recently as well.

Pervading uncertainty still surrounds the global merchant ship fleet’s decarbonisation trajectory. An unclear route towards alternative fuels, the accompanying technology, and related environmental regulations awaiting further specification, complicates the outlook for shipowners facing long-term investment projects.

Meanwhile a puzzling trade outlook, both in the short- and longer-term may be causing additional hesitation in ordering new ships. Over the past couple of years geopolitical influences have become more prominent, with possible and unpredictable consequences beyond the short-term. Also, on an extended view over a typical lifespan of some new vessels, employment opportunities could weaken. World seaborne trade in fossil fuels – especially coal and crude oil – is likely to diminish.

Investors evaluating fresh newbuilding orders face a daunting task.