- Charter rates for car carriers have declined from the 2023 peak of over $110,000 per day to around $95,000.
- The correction stems from moderated car export demand and a significant increase in fleet capacity.
- Chinese car exports remain a bright spot, growing by 26% in 2024, while Western tariffs on Chinese EV imports have impacted east-west vehicle trades.
- Fleet expansion, with 44 new vessels delivered in 2024, is tempering record levels of global car trade.
- Clarksons forecasts further easing of charter rates and limited demand growth of 1% to 2% annually over the next two years.
The car-carrier market is experiencing a notable correction as charter rates fall significantly from the unprecedented highs of 2023, according to a report by The Loadstar, citing insights from shipbroking firm Clarksons. A mix of slowing demand and fleet growth is reshaping the industry, challenging stakeholders to adapt to evolving market conditions.
Decline in Charter Rates
Charter rates for 6,500-car equivalent unit (ceu) carriers have dropped from over $110,000 per day in 2023 to approximately $95,000. This adjustment reflects a stabilization in car exports and an influx of new vessels resulting from the surge in orders placed during 2022.
Challenges in Global Vehicle Trade
Western tariffs on Chinese electric vehicles and logistical disruptions have created obstacles for the east-west car trade. Hoegh Autoliners’ recent five-year $100 million shipping agreement with a major automotive client highlighted these challenges, emphasizing the impact on vehicle trade flows.
Market Indicators and Regional Trends
Clarksons’ seaborne car trade indicator showed a modest 3% year-on-year growth in the first ten months of 2024, a sharp contrast to the 18% growth in 2023. Factors contributing to this slowdown include the waning of post-pandemic demand, high vehicle prices, rising financing costs, and uncertainties surrounding the electric vehicle transition.
Bright Spots in Global Trade
Chinese car exports have emerged as a significant growth driver, increasing by 26% in 2024. This performance has solidified China’s position as the world’s largest car exporter, with an estimated 5.3 million vehicles shipped this year. Meanwhile, imports into the Middle East and ASEAN regions have also shown resilience.
Impact of Fleet Growth on Market Dynamics
The global car-carrier fleet has expanded by 8% in 2024, with shipyards delivering 44 new vessels, a fourfold increase compared to 2023. This growth is beginning to exert pressure on older, smaller vessels, even as global ocean car trade is set to reach a record 24.5 million vehicles.
Future Outlook
Clarksons predicts further declines in charter rates as fleet growth accelerates—projected at 12% in 2025 and 8% in 2026. However, demand growth is expected to slow to just 1% to 2% annually over the next two years, potentially creating an oversupply scenario in the market.
Conclusion
The car-carrier market is at a pivotal moment, balancing increasing fleet capacity with evolving trade dynamics and moderated demand. Strategic adjustments will be crucial for stakeholders to navigate this period of change and maintain competitiveness in the global market.
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Source: The Loadstar
