I spent decades commanding cargo ships on the routes that feed global trade. The one thing shore-side buyers never asked me about was where the ship was financed. That is about to become a costly oversight.

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A commercial vessel costs between $30 million and $150 million to build, depending on type and specification. It takes two to three years to deliver. Almost all of it is financed with bank debt secured against the vessel’s projected earning power. Remove the bank financing and the vessel does not get ordered. It does not enter the fleet. Five years later, the capacity that global trade expected to be there is not there.

The structural picture is more complex than it looks from the rate side of the desk.

Petrofin Research, which has tracked global ship finance annually since 2008, publishes the Petrofin Global Index, a measure of bank lending relative to fleet size. In 2008, it stood at 100. At end-2024, it stands at 63. Bank lending in absolute terms has remained relatively stable, the top 40 global shipping banks held portfolios of $289.65bn in 2024. But the fleet has grown substantially faster. Bank lending now represents approximately 60% of all ship finance types, down from 67% the prior year. The growth of the global fleet, which Clarksons values at $2 trillion including the orderbook, is being funded primarily by non-banking sources: leasing, alternative credit, export finance, and private equity.

The gap between fleet growth and bank capacity to finance it is the risk. And it is not evenly distributed.

European institutions that historically dominated ship finance (German KG houses, Scandinavian lenders, major UK banks) have scaled back, driven by Basel III and IV capital requirements that make long-duration shipping loans expensive to hold on a risk-weighted basis, and by ESG frameworks restricting lending to tanker and dry bulk segments. Chinese and Asian leasing has absorbed a portion of that withdrawal. Coverage is skewed toward large new-build tonnage for established operators. Mid-market owners serving secondary routes and specialized cargo have had less access to replacement capital.

Here is the timing problem trade executives consistently miss.

The vessels operating your trade lanes today were ordered three to five years ago, financed at conditions that existed then. The vessels that will be operating in 2029 are being ordered now. If the capital available to those orders is not keeping pace with fleet demand, the capacity eventually reflects it, on that same multi-year lag. Ocean freight rate negotiations happen in the present. The capacity behind those rates is shaped years upstream.

The Red Sea disruption from late 2023 onward showed how quickly structural fragility becomes a rate problem. According to the UNCTAD Review of Maritime Transport 2025, the Cape of Good Hope detour added approximately 30% to voyage lengths, contributing to an estimated 11% increase in overall container TEU-mile demand. Vessel rerouting pushed global ton-miles to a record 6% increase in 2024, nearly three times faster than trade volume growth. Spot rates on Asia-Europe routes spiked toward COVID-era peaks by mid-2024. By May 2025, Suez Canal tonnage remained 70% below 2023 levels. The lesson is not specific to Houthi attacks. It is that the fleet has less spare capacity buffer than headline vessel counts suggest, and when effective capacity gets absorbed fast, rates respond before supply can adjust.

Decarbonization adds another layer of capital competition. IMO’s Carbon Intensity Indicator regulations are tightening progressively through 2030, with the 2050 net-zero trajectory requiring significant fleet renewal. Vessel owners are simultaneously choosing between retrofitting existing ships for compliance and committing to new alternative-fuel newbuilds. Both require financing. Both compete for the same contracted pool of capital.

New structures are entering the space: tokenized maritime assets, structured private credit, institutional alternative vehicles. They are supplementing the bank market, not replacing it. The direction is toward a more distributed maritime capital base because the concentrated model is not keeping pace with fleet growth.

Trade executives who understand that shift develop a structural read on freight markets that rate negotiations alone cannot provide. The ships moving your goods do not appear on your balance sheet. But how they get financed determines whether they exist at all, three years from now, on the routes you depend on.

About the Author

Captain Vikas Pandey is Founder and Chief Executive Officer of Shipfinex, a maritime asset tokenisation platform operating under VARA In-Principle Approval (IPA/26/01/002) in Dubai. This article is for informational and educational purposes only and does not constitute investment advice or a financial promotion. Maritime Asset Tokens are VARA-regulated virtual assets backed by physical maritime assets held through ring-fenced SPVs. MAT values may decline materially below purchase price. In extreme scenarios (e.g. vessel total loss), residual scrap and salvage value provides a floor, but material capital impairment is possible. Distributions are not guaranteed. Secondary market liquidity is limited; early exit may not be possible.