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Idle boxships proliferate as charter rates plummet

Article-Idle boxships proliferate as charter rates plummet

Idle boxships proliferate as charter rates plummet

London: Charter rates for containerships have dropped so sharply that bankruptcies in this sector are inevitable. The amount of ships being laid up will likely approach historical highs soon. According to broker Clarkson the average daily earnings for a 3,500 teu gearless ship has nosedived $10,000 since September to $14,000 which is $14,000 off 2007's average. Smaller ships are also having a tough time, according to the Hamburg Shipowners' Association which notes a 1,100 teu vessel that was earning nearly $12,800 a day in mid-May can be hired this week for just $6,958 a day.
Charter rates now stand in many cases below operating costs meaning defaults on loans are likely. DVB Bank warns any owner getting a newbuild of between 2,000 to 3,000 teu is unlikely to break even on that ship next year. [14/11/08]

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