Rates for traditional panamax-size boxships are being given a new lease of life.
Charter rates for "classic" panamaxes in the 4,000-teu to 5,100-teu range have risen by $2,000 to more than $10,000 per day in recent weeks as well as the vessels being fixed for longer periods, brokers said.
Recent fixtures point to the classic panamax market as having risen to its highest level since last year.
The strongest market is the Atlantic, where traditional panamax vessels have been fixed at exceptional rates of about $11,500 for a short period.
That compares with levels of about $8,500 per day a month ago.
Longer periods have seen the 4,250-teu Debussy (built 2009) fixed for nine to 11 months with CMA CGM subsidiary ANL at $10,250 per day.
Separately, the 5,043-teu Tianjin Bridge (built 2004) fetched $10,500 per day for an eight to 12-month fixture with Maersk Line.
The recovery in classic panamax rates is directly linked to the improvement since the beginning of the year for larger containerships up to 8,500 teu.
Scarcity of vessels
Brokers reported there are barely any vessels over 5,500 teu open for charter, and the shortage means lines are looking to forward-fix vessels in the larger segment.
Rates have consequently risen, with larger ships such as the 8,814-teu Northern Jupiter (built 2010) taken for 18 months by CMA CGM for $24,500 per day.
Even older vessels in the larger sizes are fetching strong rates. This includes the 7,403-teu Kure (built 1996) taken on period charter by Cosco for 11 to 13 months at $21,500 per day.
The shortage of large containerships is forcing some operators to look towards smaller medium-size container vessels for their charter needs.
Consequently, ships in this sector are beginning to become scarce.
“We’ve seen quite a bit of upsizing from 3,500 to 4,250 teu and all of sudden all 4,250’s have been absorbed,” one charter broker said.
He added that the prospect of an increase in vessels being taken into dry dock for scrubber retrofits in preparation for IMO 2020 has also had an impact.
Diversification
Traditional panamax vessels had been perennially written off with the opening of the enlarged Panama Canal.
But vessels in this segment have simply diversified into new trades, especially the intra-regional and Asian routes, brokers said.
“Above 6,000 teu, availability is extremely limited,” Clarksons wrote.
even though the older baby panamaxes might not be the ideal type for many trades, their flexibility has seen them latch onto a wide variety of business in both Asia and Europe
Clarksons
“And even though the older baby panamaxes might not be the ideal type for many trades, their flexibility has seen them latch onto a wide variety of business in both Asia and Europe.”
Another broker said the shift in sentiment in the market has also led to better charter terms.
There are fewer flexible periods and charterers prepared to commit to taking vessels at higher rates up to next year.
That has led to a reduction in the idle fleet to 117 units of 336,241 teu at the end of June, according to Alphaliner estimates.
Despite the improvement for the larger and mid-size containerships, the market for smaller vessels continues to languish.
Rates for all vessels from 1,100 teu to 4,250 teu are about 25% lower than a year ago, according to the New ConTex index.
Twelve-month rates for vessels in the 2,500-teu to 2,700-teu range suffer because of service restructuring and upsizing on several transatlantic services and languish at $8,873 and $9,027 per day, respectively.
An oversupply of 1,100-teu vessels has kept the equivalent rate as low as $6,444 per day, the New ConTex index showed.
