The frenzied level of forward fixing of boxships has never been seen before, according to MPC Container Ships (MPCC) chief executive Constantin Baack.

Speaking on an Arctic Securities webinar, the German feeder provider's boss said it is now "a very unique feature" of the record charter market that owners can book ships on deals starting up to 10 months ahead.

Previously, companies worked 30 to 40 days ahead, but this has changed dramatically as operators seek to secure increasingly scarce tonnage.

He cited MPCC's 2,824-teu Cimbria (built 2002), which was booked in December last year on a term of up to 39 months beginning in October 2022 at $39,500 per day.

The forward-fixing window will probably remain open over the next weeks and months, if not for the whole of the year, Baack believes.

Charter rates are now higher than in December, even for forward positions.

"This is a very new development and underlines operator concern about scarcity of assets throughout 2022," he said.

Fewer ships to come open

Baack explained that 1,600 ships would usually come open globally per year. Now lines are looking at having a pool of 500 to fix, due to owners extending existing charters or selling vessels.

"Scarcity of assets is imminent and 2022 deliveries are very, very limited," he added.

MPCC has 19 ships coming off hire this year. Many of these may be fixed again in the next couple of weeks and months.

"I do not expect the market to come down any time soon," Baack said, putting the boom down to port disruption and healthy cargo volumes.

"We are excited about the container market and excited about 2022."

Asked if the company is inundated by charter requests, he replied: "There is constant dialogue. The beginning of the year is something no one has ever experienced. The first week of January was so busy, talks with many parties — a lot of incomings."

Baack added that the market now realises 2023 positions are being chartered: "The tide has turned. At the start of the pandemic there were 10 vessels for one requirement" — now three or four charterers are chasing each open vessel.

Asked whether there is a risk of contracts not being honoured, if they are for three years starting in 12 months' time, he said counterparties such as the big container lines have strengthened their balance sheets, becoming "way more robust".

"Their contract visibility is way longer," he added, which is a shift from the past 12 years, when lines had short visibility.

Some of the risk has now passed from operators to cargo owners, he believes.

To mitigate risk, however, MPCC has front-loaded some charter rates, with higher payments coming earlier in the term.

A long-term deal that averages $30,000 per day might pay $75,000 in the first year, and is then scaled down in further years.

"We take measures to address risk, but the risk is significantly lower now than a few years ago," he added.