The decline in daily hire rates and reductions in time periods which has hit the small-sized carriers’ charter agreements is expected to take larger ones in its grip too.
“An important reason for this – apart from the overall sluggish cargo demand – is that, as the avalanche of very large vessels will be hitting the water, numerous midsize vessels will be cascaded from the main lanes to other routes that are typically served by smaller units, requiring lower-tier trades to accommodate displaced assets on an increased scale,” said MSI.
In the next three quarters, about 2.4 million teu of new build tonnage is due to be delivered through to the end of Q1 next year.
The enforced cascading of bigger ships onto secondary trades that do not warrant the upgrade may lead to “increased idling”, which will only partially be offset by slower steaming and an increase in scrapping.
MSI added:“Under these circumstances, the best case scenario for freight rates is to remain at their current levels of increase only marginally.”
