According to Alphaliner, after several particularly quiet weeks, activity in the container ship charter market has picked up slightly, especially in small sizes (1,300 teu and under), where a significant number of contracts have been completed in the last two weeks. However, the brisk activity did not translate into higher charter rates for these sizes, but all that had the opposite effect.
Ships of 1,300-1,000 TEUs have seen their rates cut substantially, with a 1,368 TEU ‘Weihai 1300’ type vessel set at $36,000 per day for a 12-month term versus $62,000 in March for a reefer vessel ‘MRC slightly larger and taller, reports Alphaliner.
Meanwhile, a pair of 1,118 teu vessels have extended their charter rates to ‘just’ $30,000 per day under 12-month contract, whereas until recently that tonnage was valued at around $40,000 per day for this contract duration. .
They also mention that although these substantial corrections reflect current global uncertainties, charter rates remain at all-time highs at these sizes and could recover.
Otherwise, the rest of the market remains mostly stable but slow, as a result of a continued shortage of ships.
Charter rates for short durations remain at very high levels, says Alphaliner. Back above $100,000 in some cases, suggesting continued optimism from carriers, despite a persistent drop in spot freight rates.
On the other hand, raising long-term cargo contract rates could give carriers renewed confidence to lock in tonnage on multi-year charters at competitive charter rates. However, the macroeconomic environment remains complex. Global economic and geopolitical uncertainties continue to undermine confidence, with inflation around the world and fallout from the war in Ukraine darkening prospects for growth and demand for goods.
He adds that, at the local level, the disruptions caused by the Covid lockdowns in China are a nuisance for shippers and exporters alike, with uncertainty as to when the situation will normalize.
Finally, Alphaliner mentions that there is concern that the decline in congestion at US West Coast ports could worsen again due to fears of labor unrest in Los Angeles, Long Beach and Oakland in the coming months.