11 January 2023 (Lloyd's List) - BOXSHIP charter rates have stabilised after falling 80% in five months to signal the end of the pandemic-linked, “once-in-a-lifetime” market peak and a return to normal over 2023. Vessels with 4,250 teu capacity that were chartered for as much as $107,000 per day for 12 months are now fixing for $22,000, shipbroker reports show. Rates to charter smaller containerships are steadying after a dramatic fall over the fourth quarter. “The market has normalised and is going back to where we are fixing for periods of three to six months, or six to 12 months at rates which in 2019 would have been considered quite okay,” one containership broker told Lloyd’s List. “They have corrected from a totally unrealistic peak, a once-in-a-lifetime level.” Containership fixtures will contract in both duration and volumes over 2023, according to shipbrokers. Rates began climbing in the third quarter of 2021 to peak in mid-2022 as container lines secured tonnage amid record port congestion as the supply of ships outpacing demand. The correlation between market strength and fixture length meant non-vessel owning operators agreed charter rates to container lines for the longest period possible while rates were high.This would now reduce the number of ships becoming open over 2023 and 2024. There were only a handful of post-panamax boxships available excluding potential re-lets, brokers told Lloyd’s List. The number of panamax boxships available for charter was also below normal. Record volumes of secondhand sales in 2022, which also reflected lines’ chase for tonnage, further lowered charter availability this year. “The container charter market remains characterised by a shortage of ships across most segments, which helps charter rates stay at relatively healthy levels, but the lists of available vessels are slowly growing,” Alphaliner said in its latest weekly report. The container consultant characterised short-term demand charter rate prospects as “grim”, citing poor spot cargo rates at pre-Covid levels, and some carriers struggling to reach breakeven on routes. Demand for container tonnage was “expected to remain subdued in the foreseeable future”, the report said. The chartering boom also fuelled record volumes of containership orders over 2021 and 2022, with the first of these new ships delivering from the second half of 2023. “We're probably more optimistic for charter rates for the first half of the year,” the shipbroker said. “Over the second half we start to see a number of these newbuildings being phased by liner operations so it’s going to be a relatively soft year.” Alphaliner estimated 2.4m teu of newbuilding capacity, or nearly 10% of the existing fleet, was expected to hit the market in 2023, and a further 2.8m teu in 2024. That said, an anticipated rebound in China’s economy was expected to lift container exports and imports within Asia, a key regional market for chartered tonnage which could help limit overcapacity. “If we see a re-opening boom in China, then probably I'll be a bit more optimistic about the Asian market and that ability to take up tonnage from the middle of this year,” it said. “There’s a lot of ‘ifs’ and ‘buts’ and ‘maybes’ out there.” Charters concluded in the beginning of the year included the 2010-built, 7,000-teu Northern Monument to SeaLead, a sublet agreed for six months at $38,000 per day. The same ship would have earned about $125,000 daily last September. CMA CGM extended the charter of two smaller feedermax ships, paying $10,500 per day for the 2012-built, 1,118 teu Atlantic Geneva and $8,400 daily for the 2007-built, 724 teu Atlantic Bridge. Rates remain above pre-pandemic levels. Boxships of 700 teu capacity were chartered at rates of $4,900 per day three years ago, according to Harpex assessments provided by German shipbrokers, while 6,500 teu ships had daily charter rates of $25,000.