The 2027 Contract Season Opens With an Orderbook at 40 Percent of the Fleet
Every year from November to January, east-west trades negotiate their annual service contracts. This year the backdrop has changed. In 2026 the story was too few ships, congested ports and high rates. In 2027 it is likely to be too many ships, flat volumes and softer rates. BIMCO and Drewry reached the same conclusion within days of each other in late October: supply growth will outpace demand.
BIMCO puts the global fleet above 34 million TEU, up 10 million TEU in five and a half years, with an orderbook exceeding 14 million TEU, or about 42 percent of existing capacity. Drewry is blunter: 15.5 million TEU on order, close to 45 percent, the highest since 2009, including 82 ships and roughly 1.1 million TEU contracted in September alone. Deliveries average about 130,000 TEU a month and are expected to double next year. BIMCO forecasts capacity up 4.6 percent in 2026 and 9 percent in 2027.
Shorter voyages matter more than new ships. About 63 percent of Asia-Europe capacity has returned to Suez, Maersk says full restoration comes before March 2027, and Drewry expects canal transits back to 80 percent of pre-diversion levels by February 2027. The same fleet on a shorter route completes more voyages a year. Drewry estimates the end of Red Sea diversions will release 1.6 million TEU of effective capacity in 2027, while BIMCO calculates that full normalisation would leave ship demand about 10 percent lower than continued Cape routings. In shipper terms: next year's effective capacity is nearly a tenth larger than this year's.
Demand cannot absorb that. Volumes rose 5.1 percent year on year in the first seven months of 2026, with East and Southeast Asian exports contributing more than half the gain, which is not weak. But BIMCO's 2027 demand range runs from 0.5 to 4.5 percent, Hormuz closed at the bottom and normal transits at the top. Supply grows 5 to 6 percent. The gap is the story.
Spot markets are already pricing it in. SCFIS bounced 2 percent to 2,197.95 points last week on too little strength to call a trend. SCFI stands at 2,351 dollars per 20ft and 3,557 per 40ft on Asia-Europe, both up under 0.7 percent. Among week 46 quotes Maersk is at 3,000 dollars per FEU, down another 200 week on week, with the market average at 2,800 to 3,000, below the 3,010 recorded at end-September. Drewry's numbers are more telling: some 70 blank sailings on east-west trades in October falling to 50 in November, while effective capacity still rose 5 percent month on month. Blank sailings can no longer hold back fleet growth. Between August and September, east-west contract rates slipped modestly, ending three consecutive months of increases.
The way you negotiate a 2027 contract therefore has to change. First, do not anchor on this year's spot peak. High rates in 2026 came from diversions, typhoons, congestion and fuel stacking up, not from scarce capacity. Anchor on the cost structure that exists after Suez normalises. Second, lock in tranches rather than the whole year. Asia-Europe restores fastest with the most certain downside, so lock it early and long; the trans-Pacific is exposed to tariffs and policy shifts, so lock by quarter or keep 30 to 40 percent on spot. Third, make volume commitments and penalties symmetrical. Carriers offer low rates in a loose market but write minimum quantities hard. A lower commitment at a slightly higher unit rate beats a low rate attached to a number you cannot deliver. Fourth, take the bunker clause apart. Singapore VLSFO rose from about 400 dollars a tonne in January to 900 in September; a fully floating BAF hands you all of next year's oil risk, so cap it or set a band. Fifth, specify whether you link to SCFI or SCFIS, and which publication, on paper.
For an operator serving small and mid-sized shippers, the opportunity is not in chasing the lowest rate but in breaking the contract into combinable modules: one tranche securing space and protecting schedules, one indexed tranche riding the market down, one left on spot. In a year of too many ships and too little cargo, leverage has genuinely shifted to cargo owners. But the window will not stay open. Carriers will adjust through blank sailings and scrapping, and when that adjustment completes, prices come back. The job now is to get the contract structure right.
