Ship finance has contracted sharply over the past decade. The combined shipping portfolio of the top forty global lending banks fell from about USD 455 billion at the end of 2011 to roughly USD 284 billion at the end of 2023, a decline of close to 38 percent, while the world fleet kept growing. The capital that banks withdrew has been only partly replaced, and the replacement has come from a narrower set of providers. For independent owners, fleet renewal now depends on a thinner and more concentrated capital market.
The retreat is well documented. The Petrofin index of global ship finance, set at 100 in 2008, stood near 63 at the end of 2023. The contraction went beyond gradual attrition. Several of the historically dominant lenders left the sector outright. DVB Bank, once among the most prominent specialist transport lenders, ceased new shipping lending by the end of 2019 and wound down. NordLB exited after heavy losses. Commerzbank reduced its shipping exposure to near zero, and HSBC withdrew from Greek ship finance by the end of 2022.
The effect is visible in market share. European banks, long the core of ship finance, fell below half of the global total for the first time by the end of 2022, to around 48 percent the following year. Average bank finance per vessel has fallen as the fleet has expanded, leaving owners more reliant on equity, leasing and other providers for new tonnage.
Chinese state-backed leasing companies supplied much of the liquidity that left with the European banks. Their shipping exposure rose from about USD 59 billion in 2019 to USD 67 billion in 2020, and by mid-2025 Chinese lessors controlled a fleet equivalent to roughly 9 percent of the world total by deadweight, with an orderbook pointing to further growth.
This kept refinancing available for owners who would otherwise have faced severe constraints. It also concentrated the market. The principal lessors operate under incentive structures and a national ownership framework that differ from those of traditional shipping banks. Financing is typically arranged as a sale-and-leaseback under a financial lease, with leverage extended in some cases to ninety percent of value, though the most competitive terms are generally reserved for tier-one counterparties such as the major liner operators. The vessels are built predominantly at Chinese yards, linking shipbuilding orders, state-directed financing and leasing activity within a single ecosystem. For an industry that serves global trade, a growing share of its asset financing now sits within one national system.
The consequence falls hardest on independent owners who do not qualify as tier-one clients. A meaningful equity stake in a single-vessel special purpose vehicle typically requires between USD 5 million and USD 25 million, which remains the primary barrier to fleet renewal for mid-size and smaller operators. The alternative capital structures, examined below, are largely inaccessible at less than institutional scale. The result is a divided market: investment-grade borrowers with structured access to Chinese leasing on one side, and the broader population of independent owners managing ageing fleets with limited refinancing options on the other.
Several capital structures sit between bank debt and a private sale, each useful within limits.
Closed-end maritime investment funds have shown that institutional capital can be brought into shipping equity. Tufton Oceanic held around USD 1.3 billion across some 76 vessels by mid-2018, and Taylor Maritime listed in London in 2021 and acquired Grindrod Shipping in 2024. These vehicles serve pension funds and institutional investors, operate at commitment sizes set by that client base, and carry a management layer between the investor and the vessel that adds fees and reduces transparency at the asset level. Their secondary liquidity depends on exchange trading volumes that are thin relative to the underlying values.
Shipping bonds address borrowing at the balance-sheet level. New issuance grew from about USD 6.9 billion in 2019 to USD 24.8 billion in 2020, reflecting broad corporate refinancing conditions. These instruments are debt, and they carry no participation in the revenue of an individual vessel. They broaden funding for listed companies of sufficient size and do little for owners below that threshold.
Neither channel materially extends vessel-level capital access to the independent owners who sit below institutional scale.
Behind the access problem sits a larger one. The IMO’s 2023 strategy targets net-zero emissions from international shipping by around 2050. The Global Maritime Forum, with UMAS and the Energy Transitions Commission, has estimated the cumulative investment required at USD 1.2 to 1.6 trillion between 2030 and 2050, on the order of USD 40 to 60 billion a year for two decades.
Set against a contracting bank book of roughly USD 284 billion and a leasing sector oriented toward Chinese-built tonnage, the arithmetic does not close. The capital needed to fund the transition exceeds what the current bank-and-leasing structure delivers at the required pace. This is a capital allocation problem that no single instrument class and no single national financing system can solve.
The gap has drawn attention to newer structures, among them the tokenisation of vessel economics. The concept is narrower than the term often implies. A maritime asset token is not a title deed and confers no legal ownership of a vessel; the special purpose vehicle retains title. What the instrument represents is a contractual economic entitlement, typically a share of charter revenue distributions declared by the SPV, net of operating expenses, reserves and fees. In structural terms it resembles a fund unit issued directly against a vessel SPV, with transfers and distributions recorded on shared digital infrastructure.
The track record so far is poor. Between 2017 and 2022, several platforms across Singapore, Malta and offshore jurisdictions attempted vessel-economics tokens and failed for consistent reasons: operation without a recognised regulatory licence, secondary liquidity too thin to support exit, and token rights that did not correspond cleanly to vessel-level economics. Some constituted unregistered securities offerings under the applicable law.
What has changed is the regulatory backdrop. Dedicated digital-asset regimes, including VARA in Dubai and MiCA in the European Union, now provide licensing frameworks that earlier experiments lacked. That addresses one of the failure modes. It does not by itself resolve the others. Secondary liquidity, the enforceability of token-holder rights across jurisdictions, and the willingness of institutional counterparties to engage at scale remain open questions. The mechanism is best read as one early and still-unproven response among several, well short of a settled alternative to bank debt or leasing.
The financing base for shipping has narrowed and concentrated at the same time as the capital required for renewal and compliance has risen. For an independent owner, the practical implication is that capital strategy now carries as much weight as commercial strategy. The available channels each come with conditions: leasing brings counterparty concentration and yard tie-ins, funds bring fee drag and institutional minimums, bonds require scale and add no asset-level upside, and the newer digital structures are untested. Matching the right channel to a given fleet, at a given size, against a given renewal and compliance horizon, is now a continuous part of running the business.