Too Many Ships, Not Enough Certainty: What Global Overcapacity Means for Saint Lucia
The global shipping industry is drowning in capacity. There is currently more shipping capacity than there is cargo to fill it, yet that oversupply is not translating into cheaper, more reliable shipping for us here in Saint Lucia. That matters for anyone in our sector who is projecting and planning costs for the year ahead.
The scale of the oversupply is quite significant. Between 2020 and 2023, shipping lines placed enormous vessel orders to capitalize on pandemic-era profits. This influx has added more than 7 million TEUs (twenty-foot equivalent units) of capacity to the market, resulting in structural oversupply in the global fleet on a scale not seen since the 2016 crisis. On the main East-West trade routes, the supply-demand ratio shows a capacity surplus of over 10%, and as Maritime Gateway’s 2026 forecast puts it plainly, “even a 5% surplus is historically enough to drive rates down significantly.”
The impact of that excess capacity is being felt on the big global lanes. Spot rates on major routes have come under downward pressure, although rates remain volatile as strong demand, congestion and geopolitical developments continue to affect the market. Analysts at Maritime Gateway are clear about the current situation: “overcapacity will persist through at least 2027, emissions compliance costs will grow, and the Red Sea will remain a wildcard.” If you only focus on those headline numbers, you might assume that shipping costs into the Caribbean should also decrease.
However, analysts tracking the 2026 freight markets agree that the trajectory of rates depends on three unresolved variables: whether tariff tensions ease or flare up again, whether Red Sea security conditions allow carriers to fully return to Suez routing, and how quickly new capacity gets absorbed globally. None of those three questions has a stable answer right now. This uncertainty is precisely why global oversupply has not translated into a straightforward win for Caribbean shippers. Carriers respond to volatility by blanking sailings, idling vessels, and adjusting service networks unpredictably, and smaller, less profitable routes like ours can be particularly vulnerable to these adjustments.
That’s the real lesson for our members. Overcapacity should, in theory, be good news for anyone buying shipping capacity. However, when carriers are managing global oversupply in an unpredictable environment, the practical result for a smaller Caribbean route is inconsistent sailing schedules and rates that do not move in tandem with the global trend.
The Chamber’s advice right now is simple: do not assume global oversupply automatically means cheaper freight into Saint Lucia. Instead, build flexibility into your plans, diversify carrier relationships where possible, and closely monitor costs through the remainder of 2026. As businesses begin planning for 2027, avoid building budgets around the assumption that global overcapacity will lead to lower freight costs here.