Chappell's Shipping Show: Order(s) Up!

Research evidence excerpt

Chappell's Shipping Show: Order(s) Up!

Transportation | Shipping

May 18, 2026

Jonathan Chappell, CFA Chappell's Shipping Show: Order(s) Up!

212-497-0827 Everyone talks about cycles. Everyone remembers cycles. But does jonathan.chappell@evercoreisi.com

everyone learn from cycles? In shipping, just when you think you can

answer “yes” to that question, the siren song of the shipyards proves

too difficult to resist. Now, let’s be clear about one thing. The

geopolitically driven record rate and asset value highs today are unlike

any other cycle in the past (at least since my 1974 “born on” date) and

corporate balance sheets have NEVER been stronger. Therefore, the

downside risk and potential floor from a cyclical reversal is much more

limited in 2026 than in 1999, 2009, 2017, or 2021. However, owners

just can’t let the golden goose be, and we’re getting a clearer line of

sight at the end of the current boom (assuming an eventual end of

Middle East hostilities) courtesy of an ordering spree that may also set

a record. Given the time since our last report, we provide a bonus Chart

of the Week in this note. But one chart or two, the takeaway is the

same…the capacity surge is coming. Sure, the fleet is older, and the

number of scrapping candidates is high, but ships don’t go to

scrapyards when they’re making money (we’ll address this topic next

week). Figure 1 below first shows overall tanker newbuild orders

annually since 2000, with orders through the first 4+ months of 2026

representing the 5th-highest annual total this millennium, only after the

heady years of 2007-10. More than two-thirds of the way to an all-time

high, is there a chance that 2026 won’t be the largest ordering year

ever? Don’t count on it. The second chart in Figure 1 shows orders of