SIMIC

THE containership charter market is far from dead despite flagging import demand, falling freight rates, record high container ship orderbook and ocean carriers cancelling voyages.
Charter rates are well off their peaks. Gone are the days when a small container ship could earn US$200,000 per day for three months, or a midsize ship could earn $60,000 per day for five years. Yet deals are still getting done, according to New York's FreightWaves.
"It's not like there is no demand. There is ongoing demand. There is ongoing charter business," affirmed George Youroukos, CEO of Global Ship Lease, on a conference call.
"Charter rates are stabilizing at above historical levels," said Moritz Furhmann, CFO of Oslo-listed MPC Containers, during a conference call.
The Harpex index, which measures charter rates across multiple ship sizes, stood at 1,059 points on Friday. That's down 77 per cent from the all-time peak in March 2022. But the pace of decline has lessened this year and the index has stabilized in recent weeks. The Harpex index remains more than double its level in February 2019, pre-Covid.
Alphaliner reported on February 21: "Demand is picking up in the container charter market as Asia has gone back to work after the traditional Lunar New Year celebrations. The continued shortage of prompt tonnage across most size segments bodes well for charter rates, which should continue to rise in the coming weeks."
Charter activity is not evenly spread, however. Almost all of it is the midsize and smaller ship categories, vessels with capacity of around 10,000 TEU or lower.
The reason is that almost all of the larger vessels were put onto multiyear charters during the boom. Those contracts won't expire in the near future. Furthermore, larger vessels whose charters were coming up for renewal this year were "forward fixed". New charter extensions were already agreed to last year.
There are no more forward fixtures in any size category. "The forward fixture market is effectively on hold," said GSL CCO Tom Lister.
According to Mr Youroukos: "Charterers now wait until two to three months before expiration to enter discussions for renewals. They want to see for themselves what the demand is from their clients, the shippers."
Another big change: Charter durations have reduced sharply. No one is signing multiyear deals anymore. GSL has placed four of its ships on charters since October at an average duration of 10 months.
Among charters by top liner companies beginning this month reported by brokerage Braemar: MSC has chartered the 3,469-TEU Hansa Europe for two to four months at $17,400 per day and the 1,355-TEU Atlantic West for five to seven months at $13,000 per day. Hapag-Lloyd has taken the 2,506-TEU Maira for four to seven months at $17,750 per day.
CMA CGM, which has been particularly active, has just chartered four ships: the 3,434-TEU Hope Island (eight to 10 months; $17,250 per day); 2,754-TEU Atlantic Discoverer (10-12 months, $17,000 per day); 1,7891-TEU Sheng An (six to eight months, $14,500 per day); and 1,355-TEU Atlantic West (five to seven months, $13,000 per day).