The positive mood is keeping the container shipping charter market afloat Ship’s crew

From Mike Wackel (The Loading Star) –

More optimistic demand forecasts and the prospect of a better peak season this year are driving a rally in the container ship charter market, which has seen aggressive airlines still grabbing tonnage when it opens.

According to a recent survey of supply chain professionals by logistics platform Container xChange, 48% of respondents believe this year’s peak season will be better than last year.

Christian Roeloffs, co-founder and CEO of Container xChange, said industry sentiment was “gradually turning positive”, adding: “We expect a muted recovery in demand as retailers start to clear their overstocks in the coming months until for high season.”

And shippers are hearing positive news from their major carriers that orders to replenish old stock and buy in new seasonal lines are beginning to leak out.

“I think we’re through the worst,” said a UK-based haulier contact The loading star this week.

Awash with cash and eager to grab market share, container lines have returned to the charter market to increase capacity and Alphaliner said activity in the market “remained high” this week, with “generally strong demand”.

In fact, daily rental rates are increasing for all container ship sizes, with owners demanding a minimum charter period of 12 months and positioning compensation.

For example, the Japanese shipping company ONE has just agreed a two-year charter for the 6,350 TEU built in 2008 Brighton at a cost of $32,500 per day beginning May 17. That’s only slightly below the $35,000 that previous charterer Wan Hai paid for a two-year lease during the demand boom.

The market appears to be dominated by inquiries from MSC and CMA CGM who are picking up where they left off when the downturn hit, sucking up any open tonnage in the charter market and ready to turn their checkbooks to owners who may be interested to wave ships sell.

Alphaliner noted that MSC had “bought up another six ships in the past few days,” including two 5,300-teu ships built in 1999 by rival airline Evergreen, which are expected to be sold for scrap.

Recent acquisitions result in more than 300 vessels as of August 2020, expanding MSC’s colossal buying spree from second-hand container tonnage to more than 300 vessels, resulting in an operational fleet capacity of 4.8 million TEUs, almost 1 million TEUs more than its 2 million partner Maersk.

Additionally, the Geneva-based airline has a huge order book of 1.7 million TEUs compared to the 370,000 TEUs ordered by Maersk.

CMA CGM is the second most active airline in the S&P market, having bought 100 used vessels since 2020 and increased its operational fleet capacity to 3.4 million TEU, threatening French carrier Maersk’s second with a backlog of nearly 1 million TEU place in the global airline rankings.

The loading star is recognized at the highest levels of logistics and supply chain management as one of the finest sources of influential analysis and commentary.

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