A SOFTENING in consumer demand has weakened global freight rates but the containership charter markets remains largely insulated due to the absence of open tonnage and the length of time charters.
Although there are signs of the red-hot charter market cooling, particularly in the smaller sizes, and some loss of appetite for multi-year fixtures, MSI’s May Horizon report indicates no immediate signs of major corrections, reports London’s Loadstar.
Containership owners have reported substantial charter hire backlogs, stretching into 2024 and beyond, mostly at fixed daily hire rates with ocean carriers, meaning that, unless the charterers default, the risk stays with the shipping lines.
“Charter markets are less exposed to the potential for steep decreases, given the complete lack of available vessels to hire,” said the Horizon report. “Time charter rates will weaken in H2 2022 but will likely lag movements in spot rates.”
In the feeder sector, container vessels up to a capacity of 3,900 TEU, the exponential daily hire rate growth momentum has stuttered of late, according to MSI, and charter rates for the smaller sizes “have exhibited their first signs of weakness in recent weeks”, says the report.
It notes, for example, that charter rates for benchmark 1,700 TEU geared vessels have fallen below US$60,000 a day this month and are forecast to fall to around $40,000 by the fourth quarter.
“The easing of charter rates has also begun to filter through to asset prices, evidenced by MSC’s latest purchase of the 1,700-TEU A Hoken from Star Ocean for $24 million, compared with the $33 million Maersk paid for its sister ship in February,” it says.
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Post time: Jun-07-2022