China's auto factories are building so many cars for export that the global shipping industry can't keep up.

Specialized car carriers, essentially floating parking garages, are booked out years ahead to export cars from Chinese factories. Rates to charter ships are up 65% this year on the surging demand to move vehicles out of China.

Chinese carmakers are flooding foreign markets because of fierce competition between more than 100 domestic auto brands, overproduction and a sluggish economy. Now, the shipping industry is navigating skyrocketing rates and scarce capacity.

Some automakers are so desperate to get vehicles to Europe, Australia and Latin America they are squeezing them inside shipping containers more commonly used to transport furniture, clothes and electronics.

"The strength of the market in the shipping segment is amazing, and it is due to the unprecedented growth of exports out of China," said Lasse Kristoffersen, chief executive of the world's largest car-carrier fleet, Wallenius Wilhelmsen, on an earnings call earlier this year.

Carriers have gone on a record buying spree in recent years to meet demand. Kristoffersen said the global car-carrier fleet has grown by about 40%, but still can't meet China's needs.

China exported just under 600,000 cars and vans in 2019, according to research group Mobility Global. This year, the group forecasts China could ship up to 10 million vehicles.

Registrations in the European Union for China's SAIC Motor jumped 19% and BYD's more than doubled in the first half of 2026, according to the European Automobile Manufacturers' Association. Meanwhile, legacy rivals stagnated: Stellantis gained just 6%, Volkswagen edged up 2.6%, and Renault fell 4.2%.

"You've got China moving from being insignificant to being the world's largest vehicle exporter in only a five-year period," said Andreas Enger, chief executive of Norwegian car carrier Höegh Autoliners.

The boom has pushed ocean freight rates for cars to double their prepandemic levels, Enger said.

Industry executives had expected vessel charter rates to slump this year due to a big influx of new ships entering service. Companies ordered billions of dollars worth of car carriers between 2022 and 2025 as consumer spending on vehicles surged and Chinese exports started their rapid rise. Demand for space pushed charter rates in late 2023 and early 2024 to a peak of $115,000 a day.

Instead, rates are soaring again as carriers struggle to meet demand, largely because of Chinese auto exports. The average annual rate to charter a large car carrier hit $70,000 a day in June, according to shipbroker Clarksons, up from $42,500 at the end of last year.

With a handful of exceptions, Chinese cars aren't exported to the U.S., thanks to high tariffs and software restrictions tied to national security concerns. Yet cheaper and more technologically advanced battery-electric and hybrid cars from brands like BYD and SAIC Motor haven't only overtaken longtime Western brands in China, they also are increasingly doing so in countries like the U.K., Brazil and Germany.

Tu Le, managing director of advisory firm Sino Auto Insights, said the Chinese auto industry's aggressive export plans equate to a "pressure release valve" as sales at home slow. In the first half of 2026, car sales in China fell more than 20% from the same year-earlier period, according to data from the International Energy Agency.

"When you go to Germany, you don't have 20 other Chinese car brands that are elbowing you to get that one sale, like you have in Shanghai," Le said.

Automakers prefer to ship on car carriers because driving cars on and off vessels is cheaper than other shipping methods and carries less risk of vehicle damage, said Eric Dessupoiu, vice president of finished vehicle logistics at France's Ceva Logistics. Still, automakers that have no other choice will move cars in containers, Dessupoiu said.

Wallenius Wilhelmsen's Kristoffersen said during an earnings presentation on Tuesday that up to four million vehicles are exported from China each year in containers or other alternatives to car carriers.

Shipping cars in containers isn't new; it just isn't usually done at scale to move thousands of cars. That changed during the Covid-19 pandemic, when demand to move vehicles outstripped the supply of ships. Christoph Seitz, global vice president of finished vehicles for DP World, a Dubai-based freight forwarder, said some Western automakers were skeptical of putting cars in boxes, but Chinese automakers didn't flinch. "They immediately went, 'We need more capacity,'" Seitz said.

A car being shipped by container must first be taken to a facility near a port, where it is loaded into a box and then lifted by crane onto a ship. That process must be repeated, in reverse, at the destination port.

Seitz said shipping cars in containers has become so popular that major container-shipping companies such as Denmark's A.P. Moller-Maersk and Switzerland's Mediterranean Shipping Co. have started selling their services directly to automakers.

The export supply is now so immense that Chinese automakers are expanding into the shipping sector, too. BYD launched its first dedicated car carrier in 2024 and now has a fleet of eight vessels. The automaker didn't respond to requests for comment.