John Freydag’s short stint in charge of German boxship chartering operator Contchart has been something of a baptism of fire.
The Hamburg-based company is one of a handful of consolidated outfits that charters out a fleet of more than 100 mainly smaller containerships. The market for these vessels has remained stubbornly low since March, when Freydag joined Contchart as its managing director.
Yet Freydag remains optimistic that the charter market for smaller vessels — where Contchart controls most of its fleet — could pick up for the autumn, helped by a tighter market for larger boxships.
“We need to see, finally, the smaller market picking up,” he said. “That’s something we are hoping to see during the next couple of weeks.”
While rates for larger containerships have doubled and even trebled in the past few months, those for vessels below 2,700 teu have barely budged, or moved sideways.
“We are still very much price-takers not price-makers,” Freydag said, echoing a comment he made a couple of years ago for the wider containership market.
His comments are borne out in the assessments of the New Contex, a German index which measures rates for vessels from 1,100 teu up to 4,250 teu.
To date, the only sector where rates are higher than a year ago is that for classic panamax boxships.
Rates for 12-month contracts on 4,250-teu vessels are slightly higher than this time last year, at around $13,000 per day.
Fixture benefits
But those for smaller containerships of between 2,500 teu and 3,500 teu remain more than $2,000 beneath what they were a year ago. Rates for even smaller boxships languish at around $6,461 per day for 1,100-teu vessels and $8,592 per day for ships of 1,700 teu.
But Contchart, which mostly manages containerships linked to its parent company MPC Capital, has also benefited from fixtures of larger vessels.
One of the ships on its books — the 5,500-teu Rio Barrow (built 2001) — was recently taken on extension for 12 months by Germany’s Hapag-Lloyd for $17,400 per day.
Other larger vessels chartered out by Contchart are also benefiting from higher rates.
These include the 3,625-teu Elbspirit (ex-Primavera, built 2012) and 3,426-teu Elbsun (ex-Lilly Schulte, built 2008), which are in the process of being delivered to Elbdeich Reederei.
The Elbspirit was fixed to Mediterranean Shipping Co in June for up to 15 months at around $8,800 per day.
Stronger rate
It is anticipated that the Elbsun will obtain a stronger rate when it is redelivered from CMA CGM for a fixture in October.
Freydag, who was previously managing director for Bernhard Schulte's container and bulker chartering activities, is optimistic that the cascade will eventually lead to better charter rates and filter down to the smaller ships.
But he believes that consolidation has so far done little to lift rates.
“It’s one thing to consolidate, but you don’t create demand by consolidation,” Freydag said.
The depressed market for smaller boxships has also means that fixtures have been shorter. For example, the 1,296-teu AS Fabiano (built 2007) has been taken by Israeli operator Zim for one to three months at $8,950 per day.
Similarly, the 2,800-teu Cordelia (built 2003) has been fixed by Sinokor Merchant Marine for six to eight months at $9,500 per day.
