I'm under the impression that both are true. There is overcapacity in the shipping market, which drives down prices. Because prices are low, shippers are investing in ever larger (more efficient) vessels, in order to turn a profit. This in turn leads to more overcapacity, which leads to a drive for even larger and more efficient ships.

It's a type of 'tragedy of commons' situation, where every shipping company is making the right decisions from their individual perspective, but collectively they're driving themselves into the ground.

For me this explains the rise of slow-steaming. It makes a lot of sense in this market because it lowers the cost of shipping a container (less fuel), while simultaneously reducing the market capacity (# of containers / year).

Finally, very few shipping companies make money on the major lines (e.g. China to Europe), because it's pure price competition. They're much more likely to make money in places where they have a 'monopoly' on something: e.g. being the only ship that leaves in the next 3 days, or being the only shipper going to a specific location. For example inter-Africa shipping falls in this category.