Increased rate levels are still insufficient

By Jan-H. Heikes

Container

After a slow charter market at the end of 2014 and start of 2015 the Caribbean market picked up pace towards the end of the first quarter. Effectively there was more demand for tonnage than supply, which resulted in raised time charter rates.

Small ships of 500 to 900 teu / geared lost ground in terms of availability and deal flow in the chartering activities of the Caribbean. However, when required and fixed, their rates had been firm. Time charter rates for 900 teu / geared rose by 5.6 per cent to US$ 7,500 in March (compared with December) and CV 1100 / similar increased by 9.5 per cent to US$ 8,000 with some operators still actively looking for tonnage in a tight supply market.

Vessels of 1,300 teu / geared recorded a solid 14 per cent increase in just three months. Some of this tonnage was ‘imported’ and thereby escaping weaker markets such as Mediterranean.

Amazingly, 1,700 teu / geared, in moderate demand, had not been able to play to such strength and effectively levelled UNDER the 1,300s as a result of a worldwide overcapacity in this very fragmented segment. It is interesting to note that some charterers hired their 1,700 teu vessels in the Mediterranean or Far East to cover short supply of such tonnage in the Caribbean. Those positioning from Far East loaded new empty containers. To a similar extend, but for standard Caribbean liner/feeder trades, geared 2,500 teu vessels have been affected by a worldwide oversupply, gaining ‘only’ 13 per cent; however, high specification reeferized 2,500s achieved rates of well over US$ 10,000 per day for periods of up to 24 months.

Strictly looking at the increases on a percentage basis, it looks like a rocking market. Effectively in numbers, though, the rates are still not covering the financial obligations of the charter ship owners.

Read more: Russbroker Caribbean market review