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Six-figure charter rates are back, with CMA CGM paying over $100,000 a day

Samira Samira 2024-06-13 11:13:49

Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, specializing in Europe, the United States, Canada, Australia, Southeast Asia and other markets. It is more of a cargo owner than a cargo owner~

With six-figure daily charter rates back, container charter rates have reached new heights not seen since the pandemic, with liner operators once again paying sky-high rents for short-term charters.


After the outbreak, small container operators returned to Asia-Europe trade routes. French liner giant CMA CGM marks their return with a new 7,000 TEU vessel built for short-term fixed charter.


Multiple charter brokers said the 7,092 TEU "Kota Callao" (built in 2024) has been chartered for three months at about 5,000 per day. It is one of six ships built by China's Shanghai Waigaoqiao Shipbuilding for Taiwan's TS Lines. The vessel will be delivered within the next two weeks, ahead of the start of a long-term charter with Singapore-based Pacific International Lines.


One British broker described the price as a "return to pre-pandemic times". Another said it "exacerbates a situation that has developed in recent weeks where operators are willing to pay significant premiums for short-term charter arrangements".


Feeder vessel charter rates have also risen as liner operators are willing to pay a premium for short-term charters. Capital Ship Management has chartered the 1,827 TEU Adrastos (built in 2023) to Tailwind Shipping Lines for three months at ,000 per day, brokers said. This is almost double the ,000/day charter secured by sister ship Asterios (built in 2023) for a similar period a month ago.


Similarly, Nordic Hamburg is reported to have signed a one- to two-month charter with Ellerman City Liners for the 1,380 TEU “BG Orange” (built in 2024). The carrier pays about ,000 per day, while current rent for longer lease terms is about ,000. Subsequently, the "BG Orange" will join the Nordic short-distance shipping company BG Freight Line for long-term charter.


The deals add momentum to a market that has been rising for more than five months due to the Red Sea crisis. This is reflected in the 23rd consecutive week of gains in the Howe Robinson Container Index, which reached 1,677 points.


Shipping schedules for ships of all sizes are as long as two to three years, reflecting the strong momentum of the market. Maersk has signed a new long-term agreement for five container ships with John Fredriksen’s SFL.


In the conventional panamax sector, benchmark rates have risen to around ,000/day for a two-year period. Greek shipowner Danaos secured this rate for the 4,253 TEU Seattle C (built in 2007), which has been extended by Orient Overseas Container Line, a subsidiary of Cosco rent.


Some ships are on forward charter and will be delivered in the first half of 2025. According to reports, the 4,241 TEU Navios Vermillion (built in 2007) has been chartered for 24 months at a rent of ,500/day and will be delivered in January next year.


This trend has also resulted in increased rental rates and charter periods for smaller vessels. According to reports, the 3,421 TEU GSL Melina (built in 2013) has been chartered by AP Moller-Maersk for two years at about ,000/day, while similar ships have a fixed term of three years.


Smaller vessels below 2,000 TEU are also starting to see the same improvement as larger vessels, brokers said, echoing a trend that has been emerging for some time. Greek shipowner Euroseas signed a charter with Orient Overseas (OOCL) at a price of US,000 per day, agreeing that the charter period of the 1,808 TEU "Stephania K" (built in 2024) is 24 months. The premium compared to a 10-year-old vessel is approximately ,000/day.


The charter market was higher on rising freight rates. In the week ending June 7, the Shanghai Containerized Freight Index rose 5%. According to external sources, this surge has pushed the average spot freight rate to above US,000/TEU, which has tripled since early December 2023.