Grab the high freight rates! Shipping giants are taking action to rent ships at sky-high prices

It is worth noting that this high-priced charter transaction was only a few days to half a month away from the new ship of the same 7,000TEU that CMA CGM leased from TS Lines. CMA CGM paid a daily rent of US$105,000 at the time, and the lease period was also 3 months. In such a short period of time, the daily rent soared by 46%, showing the sharp rise in chartering costs in the shipping market.

Industry analysts believe that the behavior of shipping giants to grab ships at sky-high rents reflects the current tight situation of ships in the shipping market on the one hand, and on the other hand, it also shows the shipping industry's optimistic expectations for future market trends. In particular, with the arrival of the traditional European and American peak season in the third quarter, the market demand for ships will further increase, and shipping companies are willing to pay a higher price to lease ships in order to maintain capacity supply.

As a shipowner, TS Lines has also gained rich profits in this charter boom. Since the beginning of this year, TS Lines has delivered four 7,000TEU newbuildings, two of which are deployed on TS Lines' Far East-India route, and the other two are leased to CMA CGM at high daily rents of $80,000 and $105,000 respectively. It is understood that TS Lines expects to deliver another newbuilding before the end of the year.

The soaring spot prices on European and American routes have driven the daily rent of the charter market back to six figures. The significance includes: First, shipping companies are rushing to make a profit by renting ships with high rents and short leases. CMA CGM's move means that it is optimistic about the market for at least the next three months. According to Alphliner statistics, Maersk, CMA CGM, COSCO Shipping and other companies all have more than 300 chartered ships. Maersk once said that the Red Sea crisis forced ships to detour and consume capacity, and would rent ships to meet demand. Second, small and medium-sized ships returned to long-distance routes to earn high freight rates. Not only large shipping companies, but also many small and medium-sized shipping companies have rushed into the US West and European routes; third, shipping companies have added new routes and need more ship support.

According to freight forwarding industry insiders, CMA CGM plans to open a new Asia-Europe route from June 30 to early September with seven 7,000TEU medium-sized ships. CMA CGM said that this seasonal route was established to cope with the sudden increase in transportation demand from Asia to Northern Europe and the Mediterranean.

At the same time, shipping companies have also made adjustments in route selection. On long-distance routes such as Asia to Europe and Asia to America, large shipping companies usually use large ships of 10,000 TEU as the main force. However, during the epidemic, due to capacity shortages and soaring freight rates, some small and medium-sized ships also joined the ranks of long-distance routes, hoping to get a share of the pie. However, as freight rates plummeted, these ships withdrew from the market. Now, as the market picks up, small and medium-sized ships are once again in the competition for long-distance routes.

For example, Sealead Shipping Company plans to open direct routes from China and South Korea to the West Coast of the United States, while Boya Shipping has restarted routes from the mainland to Mexico in South America. These new routes will use 1,800TEU ships.

Large shipping companies are also actively expanding their route networks to cope with the high freight rate market environment. Mediterranean Shipping Company restarted a route from East Asia to the western United States in early July, and COSCO Shipping will also launch a western United States express line, calling at ports such as Kaohsiung and Xiamen.

The current chartering costs in the shipping market have reached a record high. Shipping giants have seized market capacity by paying sky-high rents to cope with the increasingly tight shipping demand and the upcoming peak season. At the same time, shipowners have also made huge profits in the process. However, as market conditions continue to change, the future trend of the shipping market is still full of uncertainty.