The rise is obvious! Red Sea Challenge increases charter rates
Date：03-13 156 Belong to：News Information
Analysts and brokers continue to report that charter rates are spiralling as carriers look to fill gaps on routes diverted from Asia to Europe. Charter rates had fallen sharply in early December but have now rebounded quickly.
Linerlytica’s charter index rose 5% last week, with the largest charterers seeing the biggest gains due to limited supply.
“Maersk and CMA CGM have been particularly active in recent weeks, along with smaller carriers such as SeaLead and Tailwind, which have been eager to secure more tonnage for their Mediterranean routes,” said the analyst.
Meanwhile, London-based shipbroker Braemar reported a 46% increase in its container charter market index, Boxi, since mid-December, when the Houthis first launched missile attacks on international shipping in the Red Sea, Bab el-Mandeb Strait and Gulf of Aden.
According to Braemar, carriers have scrambled to deploy tonnage on Asia-Europe routes that bypass the Horn of Africa.
The rerouting around the Cape of Good Hope requires an extra two to three ships, forcing shipping lines to squeeze tonnage to maintain weekly schedules.
As a result, the company had forecast that charter rates would fall to a low of 70 basis points and average around 80 basis points by 2024. But as the Red Sea crisis hit the Asia-Europe route, the index did a 180-degree turn, rising sharply from 90 points in January to around 130 points today and rising.
Braemar commented: "Geopolitics affected our estimates for scheduled charters in 2024 and we had to reconsider. The forecast for 2024 is no longer an average of 80 points and a low of 70 points, but an average of 130/135 points and a high of 145/150 points."
Meanwhile, Alphaliner reports that shipowners and charterers are in a battle, with shipowners seeking to extend contracts, but cautious carriers wary of the instability of the current market environment and therefore seeking shorter deals.
Alphaliner believes that the market for large vessels is now largely exhausted, with no new fixtures in the 7,000-13,000 TEU range, resulting in rapid growth in the 4,000-5,000 TEU mid-size range, which is now stabilizing, meaning that attention is now turning to smaller ships.
“Fixing activity in the small container fleet has been very active over the past two weeks, especially in the 1,000 to 1,900 TEU range, with around 30 fixtures completed.” Rapidly expanding SeaLead was one of the busiest market players, repairing seven 1,700-1,800 TEU vessels, including several modern ‘Bangkokmax’ ships. ”
Braemar puts this surge in equipment in dollar terms, initially expecting a 1,700 TEU ECO-Bangkokmax price of $9,000-10,000/day this year, now rising to $14,000-15,000/day.
Braemar said the conflict between Israel and Hamas continues, so will Houthi attacks, as seen this week with the devastating impact on the crew of the True Faith.
“We are not political commentators, but a Red Sea avoidance scenario remains a possibility, perhaps throughout 2024. With this in mind, liners will be planning well in the future to minimise service disruptions.”
As a result, Braemar revised its estimate of the 2024 vessel oversupply to 10% from an expected 19%, “effectively halving the 2024 oversupply”.
Linerlytica’s charter index rose 5% last week, with the largest charterers seeing the biggest gains due to limited supply.
“Maersk and CMA CGM have been particularly active in recent weeks, along with smaller carriers such as SeaLead and Tailwind, which have been eager to secure more tonnage for their Mediterranean routes,” said the analyst.
Meanwhile, London-based shipbroker Braemar reported a 46% increase in its container charter market index, Boxi, since mid-December, when the Houthis first launched missile attacks on international shipping in the Red Sea, Bab el-Mandeb Strait and Gulf of Aden.
According to Braemar, carriers have scrambled to deploy tonnage on Asia-Europe routes that bypass the Horn of Africa.
The rerouting around the Cape of Good Hope requires an extra two to three ships, forcing shipping lines to squeeze tonnage to maintain weekly schedules.
As a result, the company had forecast that charter rates would fall to a low of 70 basis points and average around 80 basis points by 2024. But as the Red Sea crisis hit the Asia-Europe route, the index did a 180-degree turn, rising sharply from 90 points in January to around 130 points today and rising.
Braemar commented: "Geopolitics affected our estimates for scheduled charters in 2024 and we had to reconsider. The forecast for 2024 is no longer an average of 80 points and a low of 70 points, but an average of 130/135 points and a high of 145/150 points."
Meanwhile, Alphaliner reports that shipowners and charterers are in a battle, with shipowners seeking to extend contracts, but cautious carriers wary of the instability of the current market environment and therefore seeking shorter deals.
Alphaliner believes that the market for large vessels is now largely exhausted, with no new fixtures in the 7,000-13,000 TEU range, resulting in rapid growth in the 4,000-5,000 TEU mid-size range, which is now stabilizing, meaning that attention is now turning to smaller ships.
“Fixing activity in the small container fleet has been very active over the past two weeks, especially in the 1,000 to 1,900 TEU range, with around 30 fixtures completed.” Rapidly expanding SeaLead was one of the busiest market players, repairing seven 1,700-1,800 TEU vessels, including several modern ‘Bangkokmax’ ships. ”
Braemar puts this surge in equipment in dollar terms, initially expecting a 1,700 TEU ECO-Bangkokmax price of $9,000-10,000/day this year, now rising to $14,000-15,000/day.
Braemar said the conflict between Israel and Hamas continues, so will Houthi attacks, as seen this week with the devastating impact on the crew of the True Faith.
“We are not political commentators, but a Red Sea avoidance scenario remains a possibility, perhaps throughout 2024. With this in mind, liners will be planning well in the future to minimise service disruptions.”
As a result, Braemar revised its estimate of the 2024 vessel oversupply to 10% from an expected 19%, “effectively halving the 2024 oversupply”.
