Newbuilding headlines are the most visible signal in the marine-equipment market, but they are a poor guide to where demand actually originates. Most of the equipment installed on a ship over its working life is not specified on the day the vessel is ordered. It is ordered again, as a replacement winch, a reconditioned crane, a retrofitted wind-assist system or a spare hydraulic power unit, because the vessel has reached a point in its economic life where renewing it beats keeping it as it is. The replacement cycle, not the orderbook, is the quiet engine of this market, and the empirical literature now gives a fairly detailed picture of how it works: how owners decide to retire capacity, when tonnage reaches the recycling yard, how carbon regulation has already changed what a used ship is worth, and how much of the next wave of equipment demand will be met by retrofit and remanufacture rather than by newbuild alone.
A fleet large enough that replacement sets the baseline
Scale matters because a small percentage of a very large fleet is still an enormous absolute flow of equipment. UNCTAD's Review of Maritime Transport 2025 counted 112,500 commercial vessels with a combined carrying capacity of 2.44 billion deadweight tons on 1 January 2025, an annual increase of 3.4% against a two-decade average of 5.1%. That is a fleet growing more slowly than in the boom years, but still adding tonnage every year. More important for the replacement thesis is the composition of the existing fleet: as of May 2025, only 8% of the active world fleet by gross tonnage was designed to run on alternative fuels, while such vessels accounted for 53% of the tonnage on order. Over 90% of active tonnage still burns conventional fuel. The green orderbook is therefore real but narrow; the overwhelming majority of ships now trading will be retrofitted, replaced or recycled, and each of those paths generates a distinct kind of equipment demand. The entry into force of the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships in June 2025 adds a regulatory clock to the same process: UNCTAD expects recycling to grow in importance as the fleet is renewed and replaced by lower-carbon ships.
Retirement is a decision, not a date
It is tempting to treat scrapping as a function of age, with a ship leaving the fleet once it crosses some threshold. The empirical work points the other way. A study of capacity retirement in the dry bulk market by Alizadeh et al., 2016 models retirement at the level of the individual vessel, using a logit framework. The modelling choice itself carries the insight: if retirement were mechanical, there would be little to estimate beyond a calendar. A vessel-level decision can respond to freight earnings, the ship's condition and design, the alternative uses available to it, and the secondhand price it would fetch. Two nominally identical ships of the same age can therefore leave the fleet years apart. For the equipment market this matters because the demand signal is not a smooth curve derived from a fleet-age histogram; it is lumpy, driven by individual owners' calculations about whether a particular hull is still worth maintaining. The same logic applies to the decision that follows retirement: whether the replacement is a newbuild, a younger secondhand vessel, or a life-extension programme on the existing ship.
Recycling capacity sets the tempo
Timing is also quantifiable at the fleet level. Rahman et al., 2021 apply Weibull tonnage estimation and scenario analysis to the question of how much tonnage will arrive at recycling yards. Their estimate, at the time of the study, is that about 300 million gross tons will be available for demolition over the following five years, and that more than 80% of end-of-life ships are dismantled in Bangladesh, India and Pakistan. The same study puts the cost of failing to recycle that tonnage at about USD 20 billion, framed through a circular-economy lens that identifies a missing global-scale mechanism. The figures are a reminder that recycling is not a residual activity at the edge of the market; it is a capacity-constrained industry, concentrated in a handful of locations, and its throughput determines when tonnage actually leaves the fleet rather than when it becomes economically eligible to leave. A yard bottleneck delays the replacement decision upstream, keeping older ships in service longer and sustaining demand for spares and reconditioning. Regulatory tightening under the Hong Kong Convention adds a second constraint, because compliant recycling is not available at every location or price.
Carbon is already in the resale price
The sharpest recent evidence concerns the secondhand market, which sits between keeping and scrapping. Acikgoz and Oner, 2026 examine 832 bulk carriers sold between 2018 and 2025 with a cross-sectional hedonic pricing model, covering Capesize, Panamax, Supramax and Handysize sub-types and four age bands. Their central result is that emission efficiency has a statistically significant negative effect on secondhand prices across all models: higher emission intensity, measured through a technical efficiency indicator based on the EEXI or EEDI coefficients, reduces vessel values, and the magnitude varies by ship type and age group. The Supramax segment appears the most price-sensitive, followed by Panamax, Capesize and Handysize. Age has a consistently negative and significant effect on prices, while vessel size raises asset values; the efficiency indicator itself rises with vessel age and falls with larger vessel size and more recent measurement years. The mechanism is straightforward: a lower-emission ship is worth more to an owner facing tightening IMO rules, so the spread between a clean and a dirty hull widens. That spread feeds directly into the keep-versus-sell-versus-scrap calculation and therefore into the timing of replacement, and into how much capital is left for the equipment specified on the replacement.
Fleet capacity responds, but not symmetrically
At the aggregate level, supply does react to these signals, though unevenly across segments. Fan et al., 2018 model fleet capacity in the bulker and container markets using three-stage least squares, with new orders, current fleet size and demolitions as the supply variables. They find significant effects from market, cost and operational factors, and describe ordering as relatively rational while demolition decisions in the container market are cautious, reflecting the large capital investment involved. The asymmetry is the useful part for equipment demand: ordering and demolition do not move in lockstep, so there are periods when tonnage is added while old tonnage lingers, and periods when demolition accelerates ahead of replacement. Each configuration produces a different mix of newbuild specification work, retrofit work and maintenance of ageing assets.
Recycling as a decarbonisation lever
Recycling is usually discussed as an end-of-life compliance issue. A recent assessment reframes it as a front-end climate lever. Vásquez Stanescu et al., 2026 note that maritime transport contributes 2.9% of global greenhouse gas emissions and that the sector is traditionally evaluated on operational fuel cycles while lifecycle impacts are neglected. Their analysis of decommissioning scenarios finds that retiring up to 22.2% of the global merchant fleet, the share exceeding 20 years of age, could significantly cut lifecycle emissions by displacing primary iron-ore smelting with circular electric-arc-furnace marine-steel recovery. The benefit is non-linear and bound by regional energy matrices: under deeply decarbonised grids the displacement can theoretically reach an upper bound of 72% emissions reduction, while fossil-heavy power supplies reduce the net mitigation margin. The practical implication is that recycling policy and steel decarbonisation policy are linked, and that the value of an end-of-life ship increasingly depends on where and how its steel is reprocessed, not only on its scrap price.
The retrofit stream
Between newbuild and demolition sits the retrofit market, and here the evidence points toward deck equipment as the largest single opportunity. Chica et al., 2023 model the adoption of wind-assisted propulsion retrofits with an agent-based simulation, and their framing is explicit: among energy-saving technologies, deck equipment, including wind-propulsion technologies, represents the largest potential fuel savings and a growing source of industry innovation. The model gives each vessel two decision steps, first becoming aware of the technology and then running a utility calculation over three wind-propulsion options, using real-world cost and fuel-saving data. Adoption depends on subsidies, fuel prices and networking, and the authors argue that alternative commercial models such as product-service arrangements can lower the introduction barrier. For the deck and mooring equipment supply chain, the implication is that retrofit demand is policy-sensitive and clustered: it arrives where fuel prices, subsidy regimes and peer networks line up, and it pulls in structural foundations, winches, fairleads and control hardware as well as the wind-catching device itself.
The remanufacture stream
The third stream is life extension of high-value equipment, and it is more developed than the market often assumes. Alfnes et al., 2025 study remanufacturing and reuse in engineer-to-order shipbuilding through multiple workshops with original equipment manufacturers, shipyards, ship operators and a classification society, focusing on thrusters, cranes, generator sets and hydraulic power units. They identify critical success factors specific to shipbuilding, compare them with generic remanufacturing factors, and confirm the potential for interfirm tensions: the actors disagree on the importance of damage, transport, product types, product value and material composition. The equipment in question is exactly the kind of high-value, long-lived machinery that dominates deck and cargo-handling systems. A crane or a hydraulic power unit for a two-drum combined mooring winch is a capital item whose remanufacture can be economically rational well before the hull is due for recycling. The practical constraint is not metallurgy but coordination: a remanufactured unit needs a documented condition baseline, a transport chain and an agreement on who carries the risk.
What the replacement cycle means for equipment demand
Read together, these findings describe a market driven by four interacting variables: age, carbon-price signals embedded in resale values, secondhand-market conditions and the regulatory clock set by the Hong Kong Convention. Newbuild headlines capture only the top of that stack. Equipment demand splits into three streams with different technical requirements: newbuild specification, where efficiency and future-fuel readiness dominate; retrofit, where deck equipment and wind-assist hardware offer the largest savings and adoption is policy-sensitive; and remanufacture and spares, where high-value cranes, thrusters and hydraulic units can be kept in service longer than the hull. The replacement cycle is slow, lumpy and segment-specific, which is precisely why it rewards attention. Watching retirement decisions, recycling capacity and the carbon spread between clean and dirty secondhand tonnage gives a better reading of where the next equipment orders will come from than any single orderbook figure.
References
- Acikgoz, E., & Oner, G. (2026). Carbon regulations and second-hand ship prices: An empirical analysis of emission intensity effects. Systems, 14(5), 499. https://doi.org/10.3390/systems14050499
- Alfnes, E., Gosling, J., Naim, M., Dreyer, H. C., & Høgseth, H. C. (2025). Critical success factors for remanufacturing and reuse of equipment in the engineer-to-order shipbuilding industry. International Journal of Production Economics, 287, 109697. https://doi.org/10.1016/j.ijpe.2025.109697
- Alizadeh, A. H., Strandenes, S. P., & Thanopoulou, H. (2016). Capacity retirement in the dry bulk market: A vessel based logit model. Transportation Research Part E: Logistics and Transportation Review, 92, 28-42. https://doi.org/10.1016/j.tre.2016.03.005
- Chica, M., Hermann, R. R., & Lin, N. (2023). Adopting different wind-assisted ship propulsion technologies as fleet retrofit: An agent-based modeling approach. Technological Forecasting and Social Change, 192, 122559. https://doi.org/10.1016/j.techfore.2023.122559
- Fan, L., Zhang, S., & Yin, J. (2018). Structural analysis of shipping fleet capacity. Journal of Advanced Transportation, 2018, 1-11. https://doi.org/10.1155/2018/3854090
- Rahman, S. M. M., Kim, J., & Laratte, B. (2021). Disruption in circularity? Impact analysis of COVID-19 on ship recycling using Weibull tonnage estimation and scenario analysis method. Resources, Conservation and Recycling, 164, 105139. https://doi.org/10.1016/j.resconrec.2020.105139
- UNCTAD. (2025). Review of Maritime Transport 2025 (Overview). United Nations Conference on Trade and Development. https://unctad.org/publication/review-maritime-transport-2025
- Vásquez Stanescu, C. L., Marinho, L. de A., Isbaex, C., Rosa, L., Ramírez-Pisco, R., Gracia, L. M. N., & Batista, T. (2026). Beyond operational emissions: Assessing ship recycling as a decarbonization pillar for the global merchant fleet. Environments, 13(8), 415. https://doi.org/10.3390/environments13080415
