Fitch Ratings has sounded a warning for any boxship owners tempted to get carried away with recent record charter rates.
The credit rating agency said the performance of shipowners will stay strong this year after a profitable 2020.
Fitch sees spot freight rates maintaining high levels in the short term, which will in turn influence contracted rates for the rest of this year.
But the company said: "We consider the current rates unsustainable in the medium term, as the sector is susceptible to rate volatility and risks of weak economic recovery and trade protectionism, requiring constant prudent capacity management."
Box shortages and port congestion from China to Europe has pushed the cost of shipping one 40-foot container to more than $8,000, from well below $2,000 a year ago.
Despite the pandemic demand hit early last year, total volumes shipped from Asia to North America exceeded 2019 levels by more than 7%.
More growth possible
Fitch said a decline in volumes on the Asia-Europe route by about 5% in 2020 indicates growth potential in 2021 as demand recovers.
"A usually quiet period during the Chinese New Year could have eased some congestion, but demand remained strong as China maintained its production levels," the agency said.
"The ongoing virus outbreaks in many regions and mobility restrictions are likely to keep freight rates abnormally high in the short term."
Fitch views rate volatility as an inherent sector risk, and is forecasting numbers to drop once supply disruptions related to the pandemic are addressed.
The company believes more "mature" capacity management helped avoid vessel oversupply during the pandemic.
After more than a decade of overcapacity pressures, Fitch added that the industry has gone through a radical consolidation via mergers, acquisitions and alliances.
This allowed strategic capacity reduction when demand declined at the start of the pandemic, and efficient reactivation of fleets when trading rebounded in the second six months of 2020.
Consultancy Alphaliner is also bullish in the short term, with Asian holidays having had no impact on activity.
Markets sold out
"Demand for all sizes of ships remains robust and continues to be fuelled by high cargo volumes, sustained freight rates and congestion issues in US ports and elsewhere around the world," the company said.
Tonnage is tight across the board, with no vessels above 2,000 teu available for charter.
The Alphaliner charter rate index is now at its highest level in 13 years.
"Considering the lack of non-owning operator tonnage available for charter, the outlook remains bullish for owners, who will retain the upper hand for some time to come," Alphaliner said.
Vessels of 8,500 teu were recently assessed at $42,000 per day, up from $40,000 per day two weeks before.
Patrik Berglund, chief executive of benchmarking company Xeneta, warned that shippers praying for a time-out in this frenzied arena may have to steel themselves for more of the same.
"It’s no overstatement to say this really is an extraordinary time for the industry," he said.
