Boom Times for Shipping in Q1 as Container, Dry Bulk Rates Skyrocket
The first quarter of the year was a great time to be a shipowner, and Q2 may be even better, according to the latest numbers from Clarksons.
The Clarksons Research ClarkSea Index - an indicator of day rate earnings across all major shipping sectors - averaged more than $17,000 per day last quarter. It marks the best Q1 the industry has seen since the financial crisis of 2008-9, and the index started Q2 even higher, hitting nearly $21,000 per day.
Container ship earnings have led the way in driving up profitability, with exceptionally high freight rates on the transpacific and Asia-Europe trade lanes increasing margins for all of the large ocean carriers. The charter market for boxships is booked up tight, and average rates for vessels of 8,500 TEU and over are exceeding $40,000 per day. According to Alphaliner, Maersk recently chartered three classic 4,500 TEU Panamaxes at the unheard-of rate of $35,000 per day for 30 months - a rate seven times higher than seen five years ago. Zim and Hapag-Lloyd have chartered in Panamax tonnage on similar terms, according to Compass Maritime's weekly report, and even Sub-Panamax and Handy class vessels have managed to command rates over $20,000 per day.
These tremendous rates have boxship owners eyeing expansion. The first quarter of the year saw record-setting ordering activity for new tonnage: according to Bimco and Clarksons, shipbuilders booked orders for 72 boxships with a combined capacity of about 860,000 TEU, shattering a previous record set in 2011. The majority of the orders were for mega-vessels larger than 15,000 TEU.
More orders may emerge soon. COSCO - which expects a massive net profit of $2.3 billion in the first quarter alone - is rumored to be eyeing four 13,000 TEU vessels at $120-125 million each, with options for six more. OOCL is said to be in the market for a series of 15 ULCVs of 15,000 TEU each, according to Compass Maritime.
Bulker owners have also enjoyed a strong run, with the Baltic Exchange Dry Index breaking past 2,000 points in April - up more than 200 percent from the same time last year, when rates plummeted towards historic lows.