Boxship charter market cools

Wednesday, 07 September 2022

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With global liner CEOs increasingly saying the market is cooling, there’s also been a noticeable pullback in the containership charter market.

Sentiment is becoming “more negative”, Clarksons Research noted in its most recent weekly report, discussing the softening rates.

Clarksons’ Containership Charter Rate Index closed last week at 347 points, down 20% from the April 2022 high, though still more than three times the start 2021 level.

“During the past two years, the so-called ‘Last Done Level’ was the yardstick for any owner to look at and in most cases even improve to cement a new and higher benchmark,” a new report from Braemar observed, adding: “The position in the spot market has now been revoked and it now comes down to the ‘Next Level Done’ and how operators are evaluating their tonnage needs.”

MORE NEWS : CMA CGM Expects Shipping Slowdown After Another Strong Quarter

The New Contex charter index in Hamburg dropped 3.2% last week to duck below 3,000 points for the first time since January with 1,100 and 1,700 teu class ships suffering the biggest drops.

“With global economy signs not really looking bright for the near future, and energy prices still on the climb with growing inflation in the surge, it remains to be seen whether supply and demand of tonnage will keep the balance or whether flurry will set in again,” analysts working for the German index wrote in a report issued on Friday.

The Shanghai Containerised Freight Index (SCFI) spot box freight rate index stood at 2,848 points on September 2, down 10% week-on-week and now down 44% on the peak at the start of 2022, albeit still more than three times the 2019 average. Rates on the Shanghai-US west coast route fell by more than 20% week-on-week to $3,959 per feu.

MORE NEWS : Container shipping profits will drop by 80% in 2023/24: HSBC report

A new report from HSBC predicted spot rates could fall another 58% in 2023 and 37% in 2024 on average before reaching a bottom.

Unveiling record quarterly results on Friday, Rodolphe Saadé, chairman and CEO of CMA CGM, became the latest high-profile liner executive to highlight the changing fortunes in the container trades.

“The global decline in consumer spending, which was already perceptible this summer, will lead to more normal international trade conditions in the second half as well as to a downturn in shipping demand,” Saadé said.

Source : https://splash247.com

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