CHARTER ACTIVITY SLOWS, BUT RATES STEAM AHEAD

CHARTER ACTIVITY SLOWS, BUT RATES STEAM AHEAD

It was a quieter month for once in terms of activity, but no less steamy in terms of rates being paid for available tonnage. The volume of fixtures is somewhat cyclical, and after a particularly active stretch, it is not surprising to see the number of reported contracts take a short-term dip.

Many charterers have covered their requirements, and perhaps more importantly, the list of "open" vessels is small. Charterers, who are seeking ships that are clearly not available, are looking at alternative methods of providing the required services.We are now moving toward the time where the vast majority of Panamax and post-Panamax vessels, ordered last year and in 1993 are being delivered, and as these vessel come on stream, we are seeing increasing demand for feeder tonnage. This demand starts with the larger vessels and cascades through all sectors.

Post-Panamax ships are too large to transit Panama Canal.

The Europe-South America trade, one of the dominant north-south routes, accounted for two fixtures by Montemar this month. They took the geared new ship Cape Sable - 13,700 deadweight tons, capable of carrying 1,160 20-foot equivalent units (TEUs), with a speed of 19 knots - at a very firm $13,650 daily and the 18,400-dwt., 19-knot, 1,150-TEU Condor at a strong $13,900 daily.

The steep climb in rates for vessels between 600 to 800 TEUs has been most evident this year. There are only a small quantity of vessels in this sector in the tramp market, and the demand for this type is increasing as many charterers find the size a perfect fit.

At the lower end of the size range, the faster tonnage is in high demand. At the higher end, the larger vessels appear to suit operators unwilling to make the jump to the full-size compacts for their particular services.

Sea-Land Service Inc. continued the 8,800-dwt, 16-knot, cellular, geared Regina Eberhardt for a year's trading off the Continent at $11,500 daily, which is up more than 10 percent from a year earlier when it was on at $10,375 daily. Zim Intra Americas extended the 737-TEU, 11,600-dwt. Sirius, uncellular, 16 knots at $9,200, up from $8,700 a year earlier.

Some of the smaller tonnage also has been commanding extremely strong rates. The 7,800-dwt., 425-TEU, cellular, geared, 15-knot Dragon, was fixed to Flota Mercante Grancolombiana for trading in U.S. waters at $7,700 daily, up

from $7,200 a year earlier. The vessel also was chartered basis delivery Hong Kong for only a six-month period.

Clearly the strength in the Atlantic market can be evidenced by fixtures such as these. The 510-TEU, cellular, gearless Pampero was taken by Cari-Freight for 18 months at a steady $7,200 daily.

Elite Shipping entered into some long-term extensions of two vessels Arktis Pacific and Arktis Ace, 4,100 dwt., 247 TEUs, geared, 13.5 knots, at $5,150 for six months followed by 12 months at $5,450 both to Industrial Marine Carriers, the New Orleans based container/project cargo operator.

Overall, the market continues to enjoy this unprecedented strength. Our index is poised below it's high for this decade (1,210 in January 1990). We also have witnessed a record number of months of a rising index. The last time the index was marked down was September 1994. We expect the trend to continue.