At the Xinde Marine Forum, Dr Adam Kent, Managing Director of Maritime Strategies International (MSI), delivered a data-rich and forward-looking keynote that combined market analytics with deeper structural insights from MSI’s latest research. Drawing on his on-site presentation deck, Kent argued that shipping is no longer driven by traditional boom-and-bust cycles, but by a set of slower, more powerful forces reshaping supply, demand, efficiency and fleet renewal. What follows is an integrated summary of his core messages.
Asset Prices Are Normalizing from Extreme Highs, Not Crashing
Kent began by addressing the current correction in vessel values and charter rates. MSI’s models show broad softening across LNG carriers, tankers, bulkers and container vessels, especially at shorter time-charter durations. Yet, this decline does not indicate a collapse.
Using MSI’s benchmark (5-year-old vessel, 60% LTV, 7% interest), most segments remain above breakeven, still generating positive cashflow. The industry is instead experiencing a shift from the exceptional post-pandemic highs toward more rational pricing. Kent cautioned that risk is asymmetric: the correction will not affect all segments equally, and investors must distinguish cyclical retreat from structural weakening.
Global Trade Growth Has Slowed—But New Structural Drivers Are Emerging
MSI expects global seaborne trade to expand only 1–2% annually, a sharp contrast to the 4–5% growth of earlier decades.
Kent attributes this slowdown to supply chain re-regionalisation, manufacturing relocation, lower elasticity in traditional commodities and changing consumer patterns. However, the market still offers pockets of strong growth. Forecasts in the deck show:
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LNG trade accelerating by 50% over six years, making it the most certain growth story in global shipping.
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Refined product tanker demand rising as more refining capacity concentrates near resource hubs.
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Bauxite, grain and minor bulks becoming key sources of incremental demand for the dry bulk sector.
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Offshore wind installation logistics emerging as a major new tonnage consumer.
Thus, the era of “volume-driven expansion” is giving way to structure-driven opportunity, with growth concentrated in new geographies and new commodity chains.
Falling Operational Efficiency Is Quietly Tightening the Market
One of Kent’s most important insights—reinforced by a striking chart in the PPT—is that fleet efficiency has deteriorated dramatically. The amount of cargo that 1 DWT can carry per year has dropped from 9 tonnes to around 6.5 tonnes.
This decline stems from geopolitical rerouting (notably the South Africa detour), port congestion, decarbonisation-driven slow steaming, weather disruptions and labour inefficiencies. The implication is profound: Even if demand does not rise, the world needs more vessels simply to maintain today’s transport capacity. This efficiency-loss multiplier explains why freight markets often appear stronger than headline demand growth suggests.
Shipyard Capacity Is Full—But the True Constraint Is Structural, Not Cyclical
According to MSI’s slides, 2024 was one of the strongest ordering years in history, comparable to 2007. Yet, unlike 2007, the global fleet is now far larger, meaning the orderbook remains below 20% of total fleet size—a reasonable level. What is genuinely constraining the market is structural shipyard allocation:
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Large vessel slots are almost fully booked until 2028.
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Car carriers and large containers have seen aggressive over-ordering and may face long-term supply pressure.
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Small and mid-size tonnage, specialised ships and feeders risk future undersupply.
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Alternative-fuel technologies remain unevenly distributed: LNG and methanol dominate orders today, while ammonia and hybrid solutions remain embryonic.
These mismatches will shape the competitiveness and earnings of different asset classes for years to come.
Newbuilding and Second-Hand Prices Will Decline—But Only Gently
MSI predicts a gradual softening of newbuilding prices as deliveries in 2026–2028 surge while contracting activity eases. However, cost inflation in steel, labour, emissions equipment and alternative-fuel systems sets a natural price floor. Second-hand values will follow a similar trajectory: lower than today’s highs but still above long-term historical medians. In Kent’s words, the market is heading toward “a downward adjustment, not a downward spiral.”
Conclusion: Shipping Has Entered a Structural Era, Not a Cyclical One
Kent’s analysis makes clear that global shipping is transitioning toward a structural cycle, where efficiency, technology choices, trade geography, carbon policy and shipyard capacity matter more than short-term freight volatility. Future winners will not be those who simply time the freight market, but those who understand:
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the new efficiency dynamics,
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the emerging regional demand centres,
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the technological and fuel-path uncertainties,
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and the long-term imbalance between required tonnage and available shipyard capacity.
As Kent concluded, to understand the future of shipping, one must first understand its changing structure.
by Xinde Marine News Chen Yang
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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