Analysis: Magic Danaos smashes it – and now look what's next
Risk-on risk-off? Doesn’t matter… maybe.
The availability of open container tonnage on the charter market tightened further in the first week of the year.
Desperate ocean carriers are forced to forward fix ships six months or more in advance, for periods of three to five years.
According to Maersk Broker, containership owners are weighing up their options, either to accept multi-year charters at highly elevated daily hire rates, or hold out “with the expectation that the market will continue to firm”.
Maersk Broker said: “Owners could fix their vessels in a heartbeat, should they be willing to, although given the position they find themselves in, most owners continue to sit back and wait for the right deal to come along.”
Moreover, it appears that the shipowners cannot lose: for every approach from a carrier charter broker there is an offer on the table from an S&P broker tasked with snapping-up the vessel for tonnage-hungry shipping line clients.
“It really is a win-win for the owners at the moment,” a London-based shipbroker told The Loadstar. “The choice between a pot of gold now or maybe an even bigger pot of gold down the road is the only dilemma keeping them awake these days.”
Notwithstanding that the extreme premiums, of up to $200,000 a day for a panamax vessel paid by ad-hoc charterers last year, seem to have been consigned to history, the market is still ‘red hot’.
Carriers have found themselves unable to find tonnage to cover their liner commitments on secondary routes, and the vessel shortage is expected to worsen over the coming months as ships that have had surveys and repair work postponed several times now need to dry-dock.
“Given the fact that that most transactions are now being done on a forward basis, it is unlikely that owners will show signs of mercy,” said shipbroker Braemar ACM.
Indeed, carriers reluctant to agree long-term charters previously are now obliged to accept that they must be prepared to take up any deal offered, or they will be outbid by rival lines. Additionally, according to broker sources, charterers are being “dragged to the table” by owners, mid-way through existing charters for “take-it-or-leave-it” extensions at vastly increased rates.
“We are seeing carriers losing their ships with six months or more left on their charters and longstanding owner-charterer relationships become very strained,” a broker told The Loadstar.
An example of the astronomical resurgence of the ‘workhorse’ panamax fleet since the start of the pandemic is the recent fixture by Zim of the 4,330 teu Bermuda, which has been taken by the Israeli carrier at $42,000 a day for 46-50 months. The charter backlog on the 2010-built ship will be a massive $63m – dwarfing the $11.8m price Greek shipowner Navios paid for the vessel in November 2018.
Interestingly, in December 2016, Zim briefly took charge of the same ship for two months, paying the then owner just $4,000 a day.