Red Sea disruptions continue to push up container freight rates since the start of the year
Date：04-20 140 Belong to：News Information
Since the beginning of the year, containership values have risen sharply across almost all sectors and age categories.
After a long period of decline, values in the sector have been steadily declining after reaching a record peak during the container boom at the end of the first quarter of 2022. However, since January 2024, values have moved in the opposite direction, with older ships showing the greatest strength, with the value of 20-year-old 1750 TEUs increasing by 43% since the new year, from $6.99 million to $8.6 million.
Figure 1: Container value growth by sub-sector since the beginning of the year
Since the beginning of the year, rising earnings have supported the rise in share prices. For example, in the Handysize segment, earnings over the year have jumped from $9,280/day on January 1, 2024 to $12,940/day today, an increase of 39.4%.
This is mainly due to the ongoing disruption in the Red Sea. By detouring around the Cape of Good Hope, ships travel longer distances, with fewer ships available, thus pushing up rates. According to trade data from VesselsValue, container journeys transiting the Cape of Good Hope increased by almost 200% in the first quarter of 2024 compared to the first quarter of 2023.
However, the latest forecast from Veson's Market Outlook predicts that despite the ongoing conflict, ship supply will continue to outstrip demand as more new container ships come into service, which will put pressure on rates in the future.
MSC's container acquisition spree of the past few years shows no signs of slowing down, accounting for nearly a quarter of all container sales reported so far this year. The most representative are the "Post Panamaxes Buxcoast" (6,892 TEU, Daewoo), sold in August 2001, and the "Buxcliff" (6,892 TEU, Daewoo), sold in June 2001, with a unit price of $22.5 million and a value of $20.01 and $19.95 million respectively. Also in March, Sub-Panamax Odysseus (2,824 TEU, 2006, modern Mipo) was sold to MSC for $15.90m, VV value $13.61m.
After a long period of decline, values in the sector have been steadily declining after reaching a record peak during the container boom at the end of the first quarter of 2022. However, since January 2024, values have moved in the opposite direction, with older ships showing the greatest strength, with the value of 20-year-old 1750 TEUs increasing by 43% since the new year, from $6.99 million to $8.6 million.
Figure 1: Container value growth by sub-sector since the beginning of the year
Since the beginning of the year, rising earnings have supported the rise in share prices. For example, in the Handysize segment, earnings over the year have jumped from $9,280/day on January 1, 2024 to $12,940/day today, an increase of 39.4%.
This is mainly due to the ongoing disruption in the Red Sea. By detouring around the Cape of Good Hope, ships travel longer distances, with fewer ships available, thus pushing up rates. According to trade data from VesselsValue, container journeys transiting the Cape of Good Hope increased by almost 200% in the first quarter of 2024 compared to the first quarter of 2023.
However, the latest forecast from Veson's Market Outlook predicts that despite the ongoing conflict, ship supply will continue to outstrip demand as more new container ships come into service, which will put pressure on rates in the future.
MSC's container acquisition spree of the past few years shows no signs of slowing down, accounting for nearly a quarter of all container sales reported so far this year. The most representative are the "Post Panamaxes Buxcoast" (6,892 TEU, Daewoo), sold in August 2001, and the "Buxcliff" (6,892 TEU, Daewoo), sold in June 2001, with a unit price of $22.5 million and a value of $20.01 and $19.95 million respectively. Also in March, Sub-Panamax Odysseus (2,824 TEU, 2006, modern Mipo) was sold to MSC for $15.90m, VV value $13.61m.
