Container shipping hits bottom, but recovery may take time

Speakers on the container panel at the Capital Link Shipping Forum in Athens, part of the Posidonia Conference Programme, struggled to find comfort that there was light ahead at the end of the tunnel for the container shipping, which has experienced a sharp slump over the last 12 months with some of the lowest container freight and charter rates in the sector’s history.

Evangelos Chatzis, cfo of Danaos Corporation, drew a comparison with the 2009 slump in the aftermath of the global economic crisis, but said today the issue was demand with 2015 being the first time ever growth in container shipping demand had been a fraction of GDP growth.

Sounding some hope he said: “We have seen the market in 2016 go sideways a bit so maybe this is an indication that we are at close to the bottom. Come spring 2017 we may see better days.”

This positive note was not necessarily shared by other panelists, and Hermann Klein coo of CPO Holding (Offen Group) highlighted the state of the charter market. He noted that a 5,500 teu ship chartered for $5,500 per day, while a 8,500 teu ship had a day rate of $8,500 per day.

“It’s just a $1 per teu per day charter rate – this is nothing,” Klein stated, adding that this meant $25 per teu for a 25-day voyage, the equivalent of price of two gin & tonics.

“Yes we are at the bottom, but not at a turning point, I think the overcapacity is too high.”

George Youroukos, ceo of Poseidon Containers, said that he was quite confident that the market was at the bottom for charter rates, but was less sure when it came to freight rates.

Meanwhile Aristidis Pittas, ceo of Euroseas, which owns six 10,000 teu boxships also remained negative on prospects. “We have a base case that 2016 – 17 look very tough as we have huge supply and low demand.”

It an apparent effort to be positive Pittas added that he believed with the market at such a low level the chances were it might go up, however, the company did not see the reason why.

Hermann Klein

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