The circle of liner operators able to compete for charter tonnage at sky-high charter rates is shrinking. Smaller carriers have yet to implement similar freight increases as main line carriers to get back into the game, says John Freydag, managing director of Hamburg shipbroker Harper Petersen.
Container ship charter rates as high an[ds_preview]d periods as long never before. When will the peak be reached?
John Freydag: At the moment there are no signs that this run is anywhere over. However, we do see that especially smaller, regional players are being outpriced from the charter market. So eventually it may get difficult to push the market up further.
So the group of active charterers is getting smaller and smaller. Should tramp owners be concerned then?
Freydag: What people tend to overlook is that the underlying demand and consequential record box rates are mostly generated in the main line trades. In other trades, the market is much more balanced and container freight is much lower. Obviously also affected by box shortages and disruption due to terminal delays, the carriers not engaged in the main line trades have been struggling to push up freight rates to the levels which can generate the necessary earnings to pay for the long periods and hire rates we are presently enjoying. But we expect that they will catch up.
A look into the crystal ball: one year from now, how will the container markets look like?
Freydag: The market will have cooled off and most of the disruptions will have been overcome. But due to the fact that many ships have been fixed long term and the influx of new vessels is limited until 2023, the continuous demand growth and limited supply will help to maintain earnings at satisfactory levels for all stakeholders.
Interview: Michael Hollmann
