Drewry: Charter Market in Unexpected Revival

Image courtesy: Hapag-Lloyd

The charter market has found a new lease of life in the recent weeks driven in part by carriers’ poor network planning ahead of the new alliances, according to shipping consultancy Drewry.

In recent weeks time charter rates for some of the biggest available ships doubled since the start of the year. In February, Panamaxes were being chartered at barely above USD 4,000 per day, but by mid-March USD 8,000 was more the going rate. Also, 8,000 TEU ships that were chartered at USD 8,000-USD 9,000 per day are now going for rates in the high teens.

It has been a particular oddity of the market that smaller units of some 1,700 TEU have until very recently fetched higher time charter rates than classic Panamaxes of 4,000-5,000 TEU, mainly because the smallest ships are less exposed to the cascade.

“The strange days of topsy-turvy time charter rate appear to be over for the time being as demand for Panamaxes has returned, seemingly out of nowhere,” Drewry said.

The consultancy added that ship broker Howe Robinson’s weighted weekly index has super-inflated by 44% since the start of March to last week, although it remains under half of its pre-financial crisis peak. Some of the reasons for the current boom include far stronger demand for container cargoes as seen from the fourth-quarter 2016 and the start of the new alliance structure that has forced carriers to look outside for units to help fill gaps as the networks take shape.

However, judging by the terms of the recent charters it appears that some units may only make a handful of round voyages before returning to the idle ranks. In many cases ships are being taken on for no longer than six months, which implies that carriers only want them to fix a short-term problem, according to Drewry.

The unexpected revival of the charter market brought short fixture periods indicating that the huge inflation in time charter rates “will soon come to an end, but improving fundamentals should allow shipowners to hold on to recent gains.”

Share this article

Follow World Maritime News

In Depth>

Events>

<< Aug 2017 >>
MTWTFSS
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3

Shipping2030 Asia

This year Shipping2030 Asia will take place with Global Liner Shipping conference, offering attendees unique access to networking with the container shipping industry…

read more >

Indonesia Marine & Offshore Expo (IMOX) 2017

Indonesia Marine & Offshore Expo (IMOX) 2017, Batamis an international maritime and offshore industrial event that brings an international…

read more >

Salvage & Wreck Asia

Could your business be affected by shipwreck? Are you a salvage professional or a wreck removal expert? …

read more >

DSM17

Donsö Shipping Meet 2017 is an all inclusive exhibition. Meals, electricity, meeting schedule and banquette dinner is included…

read more >