The coronavirus has cut charter earnings in half for big boxships, but a resurrection of demand has raised hopes that the worst could be over for tonnage providers.
Brokers this week reported the first fixtures of larger containerships since the outbreak of the crisis.
The 8,465-teu ER Texas (built 2006) has been taken on a long-term period deal by Mediterranean Shipping Co (MSC).
The vessel has been chartered for 12 to 14 months at just $12,000 per day for operation in MSC's Falcon service between Asia and the Middle East.
The rate is half what the Geneva-based liner operator paid to take a sistership just prior to the onset of the pandemic.
In March, MSC paid about $25,000 per day to take the 8,533-teu ER Tokyo (built 2006) for 12 months, while the 8,204-teu ER Tianping (built 2006) was fixed on similar terms with Israeli charterer Zim.
Since then, a build-up of idle vessels in this category has forced tonnage providers to choose between accepting poor rates to keep tonnage moving, or fixing short and hoping for a recovery.
One broker described the market for big boxships as "disastrous" with almost 20 vessels of that size open for spot trading in Asia.
Star performers
The situation marks a stark turnaround in fortunes for large boxships which were the star performers in the containership charter market before the coronavirus struck.
But the sector is hardest hit by a record number of sailings cancelled by liner operators since Chinese New Year.
More sailings have been cancelled than ever before as demand dried up in US and European markets.
This sucked the life out of the charter market for vessels of between 8,000 teu and 9,000 teu. It also pushed the idle fleet up to a record 551 ships with a combined capacity of 2.72m teu as of 25 May, according to Alphaliner figures.
Rates for large boxships are estimated to have fallen by two-thirds since the beginning of the year when the market was at $30,000 per day.
Before the pandemic, competition for larger containerships had been fierce, with only a handful to be found on the spot market.
But the dynamics changed in early March as lockdowns in Europe and the US caused demand for containerised shipments to fall off a cliff.
This led lines to cancel sailings or redeliver vessels and demand for spot ships of between 8,000 teu and 11,000 teu dried up.
Alphaliner lists the tally of spot ships of between 7,500 teu and 11,000 teu at 20 vessels, up from seven ships in the first week of April — which was already its highest since January 2018.
"Sentiment is, however, improving," Alphaliner said.
"But continued capacity cuts on long-haul routes throughout June mean that no significant pickup in demand is expected in this segment before July at best."
Smaller and mid-sizes
The malaise is affecting the market for small and midsize containerships.
Popular wide-beam designs such as the 5,466-teu Wide Alpha (built 2014) are reported fixed at new lows.
The vessel has been taken for five to 13 months with Gold Star Line at $10.500 per day.
This is a drop of 10% on the fixture a few weeks earlier of the 5,400-teu sistership Wide Bravo (built 2014) which was taken by Maersk at $12,000 per day.
Rates are also down to about $7,000 per day in the traditional panamax sector where there remain 41 spot ships looking for work, according to Alphaliner estimates.
