According to the Maritime consulting intelligence firm Alphaliner, the container ship chartering market has never been quieter since the maritime statistics consultancy began compiling its ship chartering report almost ten years ago. Although the Easter holidays affect the current lethargy of the market, they assure that many other factors can explain this situation.
Alphaliner reports that, firstly, ‘fast’ tonnage supply continues to be at an all-time low, which is naturally restricting the volume of activity. Second, ship demand has become less pressing than in past weeks, with most charterers taking a “wait and see” approach in response to the economic and geopolitical uncertainties that plague the global economy.
Part of the headwind facing shipping lines is the Covid lockdowns at the port of Shanghai with resulting disruptions to cargo movement flows. Just like the war in Ukraine with its various collateral effects on world maritime trade.
Slow economic growth in China and persistent inflationary pressures around the world that are undermining consumption are equally threats to the current international trade bonanza.
However, it is not clear whether the drop in freight rates on most major routes is ‘only’ a seasonal trend or predicts a more serious structural drop in cargo demand, reflecting a shift in consumer behavior dates back to pre-pandemic times.
Alphaliner notes that it is worth mentioning a sharp 35% drop in freight rates on trade routes in Asia and the east coast of South America since the beginning of the year, largely due to a significant drop in cargo volumes.
As for the downside of high fuel prices that show little sign of abating any time soon generated by ongoing geopolitical tensions with Russia. Despite these threats, the containerized charter market, for now, shows no signs of weakening. Considering charter rates are at record highs and while there is some calm in the air on vessels of some sizes, no significant change in direction is expected for the foreseeable future against a backdrop of continued vessel shortages and disruption to Supply Chain.
VLC (7,500-11,000 teu)
No news has been reported in the ‘handy’ VLCS segment (7,500-11,000 teu) in the last two weeks. The reference point for the charter rate (36 months) for standard 8,000 TEU units remains USD 65,000 per day for now.
LCS (5,300-7499 teu)
Alphaliner did not register any new accessories in the classic segment ‘LCS’ (5,300-7,499 teu) in the last two weeks. The benchmark for the standard tonnage of 6,500 TEUs, now going back to December (!), is $55,000 per day for periods of 60 months.
‘Wide Beam’ LCS (4,300-5,499 teu)
The “wide beam” LCS niche segment (4,300-5,499 teu) continues to be in high demand with two vessels, 4,957 teu sister vessels JADRANA and WIKING (YZJ 5000), scheduled for 48-month periods to Tailwind Shipping Lines, a shipping company established by the German supermarket giant Lidl. However, Alphaliner was unable to confirm rates for these ships.
Classic Panamax (4,000-5,299 teu)
In the classic panamax segment (4,000-5,299 teu) activity fell to zero in the last fortnight. Benchmark rates for 4,250 teu vessels remain low so far: $40,000 per day (60-month period) and $50,000 per day (48-month period) in particular, reports Alphaliner.
Container ships (3,000-3,800 teu)
According to Alphaliner, with quiet activity in the 3,000-3,800 teu segment having only one fixed ship in the last two weeks. In particular, the 3,868 teu MERKUR OCEAN, a ‘wide beam’ ‘SDARI 3800’ type unit acquired by Tailwind Shipping Lines. Chartered for a period of 48 months at an exceptional price not disclosed to the consultant.
Otherwise, the reference rate for standard units of 3,500 teu has so far been USD 61,000 per day (period of 36 months).
Container ships (2,700-2,900 teu)
With a historical evolution to its maximum in the segment of 2,700-2,900 teu. The 2,824 teu MAERSK JAIPUR being chartered for a period of 40-42 months at USD 46,000 per day, a level in line with previous commitments for comparable ships. Meanwhile, slightly shorter 36-month stints have been made at $48,000 a day, Alphaliner reports.
Container ships (2,000-2,699 teu)
Alphaliner stipulates that although charter rates tend to stabilize on most sizes, some marginal increases are still seen on some types. Illustrating this, he mentions that the 2,546 teu INDEPENDENT SPIRIT has been extended in Asia by Wan Hai Lines for a period of 36 months at a very hefty rate of USD 47,500 per day. This charter rate is higher than the USD 45,000 generally agreed upon for this size and period of aggregate employment.
Container ships (1,500-1,900 teu)
Alphaliner confirms just one charter in the 1,500-1,900 teu segment in the last fortnight, compared to four a month ago. A short negotiation with the 1,708 teu vessel JAN extending her contract with TS Lines for approximately 35-45 days at a low price of USD 40,000 per day. Generally, the benchmark rate for standard 1,700 TEU ships has been about $40,000 for a 36-month term. Now in modern ‘Bangkokmax’ tonnage ranges from $40,000 for similar time terms.
Container ships (1,250-1,499 teu)
Alphaliner has recorded just one encounter in the 1,250-1,499 teu segment in the last fortnight, with US carrier Seaboard Marine taking the 1,296 teu WARNOW WHALE over 36 months at an average rate of $29,000 per day. This rate is in line with previous comparable fixtures of similar tonnage.
Container ships (1,000-1,299 teu)
Although the 1,000-1,299 teu segment is still sold out. Alphaliner highlights the latest temporary trends in downward trending charter rates. On the other hand, the valuation of the standard tonnage of 1,000 teu at around USD 40,000 per day (12 month period) is questioned considering the current weakening sentiment.
Container ships (1,000 teu)
Finally, Alphaliner assures that the tonnage below 1,000 TEUs continues to be set at extremely high figures, with a downward trend in the Atlantic, while stability prevails in Asia. Similarly, vessels of 700-850 TEUs continue to be set above 20,000 USD per day in both zones for charter periods of 12 months.