The decrease in freight rates is impacting the operation costs of holding vessels chartered for shipping lines, according to Alphaliner. This unsustainable scenario for carriers, especially those with smaller fleets or those who entered in the East – West trades opportunistically in 2021. Therefore, some carriers have had to re-deliver pricey tonnage charterers early.
Some examples are the MPC container ships which have agreed on early re-delivery of two of it ships; the CARPATHIA and the AS CARLOTTA against financial compensation. These two ships were fixed on behalf of the USA wholesaler Costco, which decided to be accountable for shipments and the peak of the container capacity crunch, according to Alphaliner.
Furthermore, Costco jas also announced that it was downsizing its ship charter activities, which consists to seven vessels, reports Alphaliner.
On the other hand, CULines (China United Lines) has been forced to downsize the East – West trade ambitions by terminating its cooperation with Shanghai-listed Antong Holdings. The financial compensation of this decision was set at USD 67M for the chartering of twelve Panamax vessels fixed between Asia – Europe and Asia – US at a rate of USD 52000 per day.
The UK Shipping company Allseas, currently running a China – Europe service launched in 2021 due to the COVID cargo bonanza was dropped including five pricy chartered vessels. Sadly, Allseas did not have sufficient financial resources to pay the compensation, therefore, ending up in administration.
Re-delivery occurs when carriers hit major financial restructuring or bankruptcy rather than the COVID cargo boom and collapse of freight rates which leads to minimizing losses in the current times.