Container vessel time charter rates have risen to 10-year highs amid an ongoing bull run in container freight markets, says an article published in SPGlobal.
Charter Rates Assessments
Time charter rates for a ship with a capacity of 8,500 twenty-foot equivalent units registered at $54,000/d is the highest assessment in more than 10 years.
This represents a 151% increase over the year-ago assessment, when the chartering cost for an 8,500 TEU ship was $21,500/d.
Second half of 2020 surged demand for container products
Charter rates hit multi-year lows in 2020 as bleak carrier outlook brought on by the coronavirus pandemic began to be felt due to which many carriers opted to return chartered vessels early in the hopes of recouping some of the leasing costs, ballooning the global idle fleet.
The Platts Global Container Index, a weighted average of all Platts’ assessed routes, was assessed on April 23 2020 at $1,008/FEU, but has since grown by 337% to $4,412/FEU on April 23 2021.
But as a second-half 2020 surge in lockdown-induced consumer demand for containerized products began to support freight rates, ocean liners quickly turned to tonnage providers for additional capacity.
A shipowner source said, “A vessel usually chartered at two to three months is now chartered for two years, at a much higher cost. Our fleet would have been chartered at $6,500/d in May last year, with only a few months’ term.”
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Source: SPGlobal
