Hire rates for geared 2,500 TEU charter vessels are finally picking up. Strong demand in Asia fuels rising expectations.
The seasonal slowdown in chartering activity around Chinese New Year was pretty light this year, with the volume of unemployed[ds_preview] tonnage below 3,000TEU continuing to drop as from late February. The idle fleet above 3,000TEU did increase in early March, according to Alphaliner, but without any notable negative impact on charter rate levels. The ConTex gained over 5% during the past four weeks (since middle of February), with the 4,250TEU baby panamax type again stealing a march on all other segments. The ConTex assessments for the 4,250TEU class went up by 12% and 16% for 24 month and for 12 month periods, respectively. Demand for panamax tonnage continued to be supported by vessel shortages in the Far East/North America trade due to port congestion even after the announcement of a deal between terminal operators of the Pacific Maritime Association and the stevedores’ union ILWU. The work slowdowns that accompanied the talks since autumn led to severe congestion and unprecedented waiting times for container ships in the Long Beach/Los Angeles area. Most of the extra ships that were chartered in by carriers to keep up sailing schedules are likely to get redelivered once the cargo backlog has been cleared. However, demand for such extra sailers did not completely dry up and there were still reports of more short period/round voyage fixtures of panamax vessels emerging as HANSA Journal went to press. The 4,256TEU »Hammonia Calabria« was reportedly fixed to MOL at 15,250$/day for two round voyages between the Far East and the US West Coast. The 4,294TEU »Northern Guard« even achieved 15,900$/day with Yang Ming Line for a brief period, albeit not for transpacific but for intra-Asia trading. Regular medium periods of 12 month duration for panamaxes continued to be fixed at a discount to the more urgent short term positions. But here, too, the trend was showing up with rate levels creeping higher in the upper 14,000’s-$. The 4,256TEU »Bernhard-S« reportedly fixed 14,600$/day in a 12 month extension with APL/NOL while other ships were rumoured to have been fixed at even higher levels subject to approval by the charterer’s executive board. Market sentiment is still positive overall although critical voices have warned that panamax ships could face a tough time defending their recent gains when the vessel gridlock off the US West Coast clears. Others suggest that tonnage demand in other trades like Intra-Asia and Far East/Africa should be sufficient to compensate for a slowdown in transpacific requirements. Only time will tell.
Other highlights during March included a further spike in charter transactions for wide-beam over-panamax vessels. It was market leader Maersk that took the initiative and fixed or extended several units in direct continuation partly for very long periods. It extended the 5,466TEU »Christa Schulte« and »Clemens Schulte« for 12 month periods at 20,000$ per day and the sisters »Charlotte Schulte« and »Carl Schulte« for long periods of almost five years at 21,000$/day, all net of the usual 3.75% address commission that Maersk normally asks for, brokers said. All the ships will continue to be deployed on the Asia/West Africa route. No doubt, the increase in period durations is a sign of improved market confidence although the small premium of just 1,000$/day for the very long period raised some eye-brows in the chartering community. The same rate level (21,000$) had previously been agreed for the 5,370 TEU »Wide Hotel«, too, also for circa five year periods with Maersk. One source speculated that negotiations over the long durations had dragged on for several months and that the container ship spot market had outstripped the agreed levels by the time the ink under the contract was dry. »Today you would have to push for several thousand dollars more,« one broker opined.
Not to be outdone,the 2,000-3,000 sub-
panamax classes witnessed a steep rise in demand as well which finally put market rates in this sector on a steady upward trend. In the Atlantic, tight availability of gearless 2,800TEU’s with high reefer intakes forced Maersk to pay a strong 10,500$/day (no address commission) for a round voyage in direct continuation on the North Europe/Mexico run with the »Hammonia Antofagasta«, counting from early April. Standard gearless 2,800TEU ships in the east were seen fixing shorter periods in the low 9,000’s but with owners gradually setting their eyes on the 10,000$ mark, too, brokers said. Astoundingly, rates for geared 2,500TEU ships are now bouncing back impressively amidst improved demand in basically all regions (Asia, Mediterranean, Americas) after a prolonged slack period for this type. In Asia, market levels quickly progressed from mid 7,000’s to 8,500-8,750$ within a fortnight while higher-spec designs with increased reefer intakes (600 plugs) secured medium to longer term employment at rates of around 10,500$/day. According to the ConTex, the geared 2,500TEU segment improved by 5-6% month on month. »The demand is high, with new requirements continuing to emerge,« as one German chartering broker said. A few opportunities in the Caribbean have yet to be covered as charterers in this region are faced with a complete lack of geared 2,500TEU’s. Rate levels there are estimated to be around 9,000$ per day which in combination with reduced bunker prices may encourage owners to ballast vessels from the Mediterranean into the Caribbean, one broking source suggested.
Employment options have also broadened for 1,700TEU class vessels, with one operator in the Caribbean reportedly sourcing a ship from as far afield as Asia to cover his needs. US operator Seaboard Marine apparently fixed the geared 1,732TEU »Hansa Meersburg« at 8,250$/day for 12-14 months for a Caribbean service, but with delivery in Asia. Rates for geared 1,700TEU tonnage in the Far East firmed up to 7,800$/day for 3-6 month period as illustrated by fixture of the geared 1,732TEU »Hansa Siegburg« to Sinotrans for its China/Philippines service. Tonnage in the Mediterranean has got scarcer, too, allowing owners to secure levels around 8,000$ per day.
Demand for feeder tonnage in the Mediterranean was also driven by congestion in North African ports and consequent tonnage shortages for some operators. Weather delays and congestion in Rotterdam also sparked demand for additional feeder vessels in North Europe, but only for round voyages and very short periods which were not enough to kickstart rate levels. SSW 1000 type vessels (1,036TEU) found short term cover at flat levels around 7,000$, with modest improvements in the offing over the coming months, according to German brokers.
Michael Hollmann
