Tuesday, March 23, 2010

Shorter charters, smaller ships dominate 2010 market

With the bulk of this year's charters dominated by smaller vessels, appetite for larger ships seems to have fallen, reports Alphaliner.

A total 88 per cent of the 1,820 fixtures for January to September have been taken up by ships with capacities of less than 2,000 TEUs, a far cry from the 10,000 TEU monsters that dominated two years ago.

Fixture periods meanwhile have also taken a dive, with charters for the first nine months now recording average leasing periods of just four-and-a-half months.

The lack of appeal for longer leases is largely being attributed to the volatility in rates caused by the large gap between capacity and trade volumes that have made carriers ever-more wary about sudden shifts in prices.

Furthermore, due to low levels of trade, many have been also pushing for lower charter fees, with spot rates for September down by 68 per cent year on year.

Ship operators argue that low rates and overcapacity put them at great risk. German lines, which own about 61.5 per cent of leased vessels, have been particularly concerned, giving rise to a recent equity deal with Chilean carrier CSAV.

Feeder operators like Singapore-based Sea Consortium meanwhile, which rely heavily on chartered loads, capitalized on the low rates by adjusting their fleets and expanding their networks.

Reference: Shipping Gazette

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