Container ship charter rates are rallying strongly, growing an average of nearly 27 percent for some vessels in the past month, as ocean carriers scramble for extra capacity amid a strong rebound in cargo volume heading into the peak shipping season.
A 3,500 20-foot equivalent-unit gearless Panamax ship is fetching $9,500 a day compared with $7,500 in April and a 2009 average of $6,575, according to London broker Clarkson.
Rates for smaller vessels are also strengthening, although at a slower pace, with a 2,500-TEU gearless sub-Panamax ship earning $7,000 a day against $5,000 in February and a 2009 average of $5,638.
Rising regional and feeder traffic is pushing up rates for the smallest ships, with a 1,100 TEU vessel rising to $4,709 a day for a 12 month charter from $4,293 two months ago, according to the Hamburg Shipbrokers Association.
The association's closely watched ConTex time charter index has climbed steadily to 322 from 239 in the first week of the year.
The rally is expected to strengthen in the coming weeks as carriers risk being short of capacity following double digit increases in traffic on key liner trades. Peak leg Asia-Europe shipments were up 20 percent in the first quarter from a year ago.
Despite the recent rally, charter rates are well below levels achieved in the 2005-2008 bull market and don't cover operating and capital costs.
The current $9,500 daily rate for a 3,500 TEU Panamax vessel compares with an average of $26,125 in 2008 and $29,958 in 2007, according to Clarkson.
-- Contact Bruce Barnard at email@example.com.