Box Ship Charter Rates Fall

Charter rates for container ships have been declining during the seasonally slow fourth quarter, particularly as uncertainty surrounds carriers over cargo volumes and freight rates heading into the new year.

A report by The Journal of Commerce said that the market for gearless Panamax vessels of 3,500 TEU capacity has experienced the sharpest fall, with daily earnings decreasing to US$13,250 from $19,000 in September, according to London-based shipbroker Clarkson.

According to the Hamburg Shipbrokers Association, the daily charter rate for a 4,250-TEU gearless vessel on a two-year time charter is $22,334 compared with $24,250 three months ago.

The report said that smaller ships are faring better with daily earnings for a 1,700-TEU Handy vessel down $500 since September at $8,250 and average rates for 750-TEU geared Federmax ships remaining unchanged at $5,300.

The HSA’s ConTex index, which tracks charter rates for ships between 1,100 TEU and 4,250 TEU, has declined to 548 from a peak of 601 in early September.

“But the market has held up better than expected and appears to be bottoming out with the ConTex unchanged for two weeks as carriers have withdrawn far fewer services during the slack winter season than a year ago when the industry was still struggling with shrinking cargo volume and slumping freight rates,” the report said.

The total worldwide idled container ship fleet currently stands at 356,000 TEU down from 1.5 million TEU a year earlier with charter owners accounting for the majority of idled vessels. “Carriers’ owned vessels are mostly employed because most liner trades are still making money despite lower utilisation rates,” the report said.

On the other hand, charter rates for larger post-Panamax vessels are described as being “relatively buoyant as carriers are competing for a dwindling number of ships that will come onto the market by the second quarter of 2011.”

It added that, “Carriers are already making enquires for large ships due for delivery in late 2011 with rates being driven up by forecasts of a growing shortage of post-Panamax tonnage.”

via Box ship charter rates fall Transportweekly . Com.

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This entry was posted on 16 December, 2010 at 08:29 and is filed under All News Stories, Shipping & Markets. You can follow any responses to this entry through the RSS 2.0 feed.