Owners dictate terms as ships head for retrofit ahead of IMO 2020
AVERAGE daily charter hire rates has soared 40 per cent since January while Shanghai Containerised Freight Index (SCFI) spot rates plunged 25 per cent, notes London's Loadstar
AVERAGE daily charter hire rates has soared 40 per cent since January while Shanghai Containerised Freight Index (SCFI) spot rates plunged 25 per cent, notes London's Loadstar.
'The two markets' sharply contrasting fortunes could put a lid on further charter rate gains now the container freight market has entered its traditional winter slack season,' said Paris-based container research house Alphaliner.
The decline in global freight rates has forced carriers to void cancel sailings this month and next, as well as rationalising services on a number of trades, 'capacity management initiatives' that 'could lead to a reduced demand for containerships in the fourth quarter.'
Fifty-one containerships retrofitting scrubbers, which takes at least six weeks, but they will be back in December. Thirty-nine of them are more than 6,000 TEU and account for some 484,000 TEU of a total 517,000 TEU removed from the market.
Shipowners are now dictating terms and conditions this year as liner operators scrambled to fix tonnage as temporary replacements for vessels assigned to dry docks.
Daily hire rates in the 7,500-11,000-TEU sector have soared, with latest reports suggesting rates had rocketed to US$45,000 for two 11,000-TEU vessels fixed by Zim for 12 months recently ?some $4,000 a day higher than previous deals.
This tranche is 'sold out' due to the spike in demand, and liner operators have been prepared to fix at virtually any price to cover tonnage out of service.
Demand has cascaded into the smaller sectors, providing an unexpected boost for previously unemployable panamax sizes. Hire rates have soared to around $15,000 a day for 4,000 to 5,000-TEUers ?thrice more than the market rate 18 months ago.
The liners are understood to be revaluating their tonnage requirements in the light of loss-making services and are preparing to off-hire as much tonnage as they can, regardless of commercial implications.
'We have had to bite the bullet on the charters this year because of IMO 2020, but that has to come to an end,' one carrier source told London's Loadstar. 'We just had a new directive from head office on the criteria for chartering-in and, by the looks of it, we are going to have to really prove the economics of each and every fixture.'