← Business Metric: Industry Specific (Infrastructure, Transport & Utilities) (all topics)
Orderbook-to-fleet ratio
What it is
Vessels on order at shipyards as a percentage of the existing global fleet, by segment. A high ratio signals incoming supply that will depress rates when delivered; a low ratio signals tightening
Orders take two to three years to deliver, so the indicator has a long lead
Impact on industries
- The clearest forward indicator in shipping - supply is visible years ahead because a ship cannot be built quickly
- It also means the industry repeatedly over-orders at peak rates and takes delivery into a trough, which is the classic shipping cycle
- Constrained global yard capacity limits how fast the orderbook can grow, which lengthens tight markets relative to previous cycles
- Environmental regulation complicates it, since older tonnage may exit earlier than expected, offsetting new deliveries