THE downward correction in containership charter rates, which began in August, is continuing as more vessels are released by liner operators into the spot market.

“The supply side is showing a clear oversupply with several spot vessels available, mainly in the Pacific region. Operators are in the driving seat with charter rates heading further south,” said shipbroker Braemar.

It noted that in spite of Golden Week holidays in China enquiries have recently increased with new demand entering the market.

“But it does appear that many discussions are not fully firm, and operators are testing owners for possible bargains and their willingness to secure employment.”

Average one-year time charter rates have plummeted from their record highs seen in the second quarter of the year when panamax (4,250 teu) units could secure a heady $115,000 per day.

While there has been little chartering activity for this vessel type recently, panamax ships are benchmarked at circa $35,000 per day, representing a fall of 70% in three months.

Charter rates still remain profitable for non-operating shipowners and remain far from the loss-making levels seen at the bottom of the market in 2017, when rates for panamax units fell to, a distinctly unprofitable, $5,000 per day.

Meanwhile, charter periods appear to be getting increasingly shorter with most recent fixtures being for a maximum of nine months duration.

“For operators, it is about setting a new benchmark with each upcoming fixture,” said Braemar. “Similar behaviour was seen from owners only a few months ago with tonnage providers pushing for higher and longer with each fixture. With the beauty of hindsight, they are now possibly realising that some decisions were not rational. The pace of how rapidly rates and periods have fallen in recent weeks is alarming. If operators are unable to stem the deterioration of freight rates, then the downward trend could continue.”

Recently reported fixtures included the 2,478 teu capacity Garfield (IMO: 9311842), owned by Greek shipowner Conbulk, which was fixed to CMA CGM for between three and five months at $25,000 per day.

Atlantic Lloyd’s 2001-built, 2,078 teu Lobivia (IMO: 9228564) was fixed to Dubai-based feeder operator Tehama Shipping for between six and eight months at $20,000 per day.

The feeder sector (below 2,000 teu capacity) has seen the sharpest drops in rates since August as confirmed by the recent fixture of the 1,700 teu capacity Penang Bridge. This 2009-built ship has been extended by Ocean Network Express, for up to six months, at $15,500 per day. In March, similar vessels were securing around $70,000 per day.

Silver Maritime’s 698 teu capacity Pacific Dalian (IMO: 9339090) has been fixed to Blue Ice Lines for six months at $14,000 per day for service in the Mediterranean.