Maritime Rush To Charter More Ships Amidst Red Sea Conflict

By
Mfame Editor
-
257

The security situation and diversions in the Red Sea have compelled container lines to seek additional ships, impacting both spot container freight rates and charter rates. The ongoing coalition air strikes in Yemen have heightened the urgency, with the recent spike in spot rates prompting a rush for immediate tonnage, says an article published on freight waves website.

Summary

  • The security situation and diversions in the Red Sea have led to an increased demand for additional ships, impacting both spot container freight rates and charter rates.
  • Charter rates are on the rise, particularly for short periods ranging from three to six months. The need for prompt vessels has led ship owners to adopt a more bullish approach, pushing for higher rates across various segments and regions.
  • The initial diversions from the Red Sea caused delays, prompting liners to charter ships for short terms as “extra loaders.” With diversions becoming more established, liners are now compelled to add additional vessels to maintain schedules.
  • The global spot freight indexes have more than doubled due to Red Sea-driven moves, significantly outpacing the increase in charter rates. The persistent crisis in the Red Sea and potential issues at the Panama Canal could mitigate overcapacity risks.

Increased Demand For Charter Ships

Charter rates are on the rise, particularly for short periods ranging from three to six months. The need for prompt vessels has led ship owners to adopt a more bullish approach, pushing for higher rates across various segments and regions. The Red Sea crisis, coupled with diversions, has fueled a surge in chartering activity.

Impact On Charter Rates And Ship Availability

The initial diversions from the Red Sea caused delays, prompting liners to charter ships for short terms as “extra loaders.” With diversions becoming more established, liners are now compelled to add additional vessels to maintain schedules, contributing to the increased demand for charter ships. The Harpex index, measuring charter rates for ships with a capacity of up to 8,500 twenty-foot equivalent units, has risen by 12% since mid-December.

Red Sea Crisis And Global Shipping Dynamics

The global spot freight indexes have more than doubled due to Red Sea-driven moves, significantly outpacing the increase in charter rates. Despite expectations of a weak year for charter rates in 2024, the Red Sea effect has led to a 28% higher Harpex index compared to January 2019, pre-COVID. The persistent crisis in the Red Sea and potential issues at the Panama Canal could mitigate overcapacity risks.

Limited Availability Of Charter Ships

The current challenge in the chartering market is the scarcity of available vessels, as most tonnage is already committed to long-term leases. Non-operating owners (NOOs) have maintained control, dictating terms and demanding historically high charter rates during peak periods. Liner companies, facing limited availability of prompt tonnage, are experiencing low chartering activity.

Stock Market Impact

Liner company stocks, including Zim, Hapag-Lloyd, and Maersk, have seen significant increases due to disruptions in the Red Sea, outperforming NOO stocks. Shares of NOOs like Danaos, Costamare, Global Ship Lease, and Euroseas have seen more modest gains, reflecting the challenges and constraints in the current chartering market.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe

Source: freight waves

11 COMMENTS

  1. Hello! Quick question that’s completely off topic.
    Do you know how to make your site mobile friendly? My blog
    looks weird when browsing from my iphone. I’m trying to find a template or plugin that
    might be able to fix this issue. If you have any recommendations, please share.
    Appreciate it! I saw similar here: Sklep

  2. Hello! This post could not be written any better!

    Reading through this post reminds me of my previous room mate!
    He always kept chatting about this. I will forward this post to him.
    Fairly certain he will have a good read. Many thanks for sharing!

    I saw similar here: Dobry sklep

  4. A person necessarily assist to make significantly articles I’d state.

    This is the first time I frequented your website
    page and up to now? I surprised with the research you made to make this actual post extraordinary.
    Excellent job!!

  6. Hey! I understand this is sort of off-topic however I needed
    to ask. Does operating a well-established website such as yours take a
    lot of work? I’m completely new to running a blog but I
    do write in my diary on a daily basis. I’d like
    to start a blog so I can easily share my own experience and views online.
    Please let me know if you have any ideas or tips for new aspiring bloggers.

    Thankyou! I saw similar here: dobry sklep and also here: sklep internetowy

  7. I’ve been exploring for a little bit for any high-quality articles or blog posts on this kind of area .
    Exploring in Yahoo I eventually stumbled upon this site.
    Reading this info So i am satisfied to show that I’ve an incredibly good uncanny
    feeling I came upon exactly what I needed. I so
    much without a doubt will make sure to do
    not disregard this web site and give it a glance regularly.
    You can see similar: ecommerce and here sklep online

  8. Hi there colleagues, its wonderful piece of writing on the topic of educationand
    fully explained, keep it up all the time.
    I saw similar here: sklep online and also here: sklep internetowy

Comments are closed.