Russbroker Caribbean market review

Last Updated on 03 February 2020

A stable shipping market against an uncertain economic background

Container Market

Globally charter rates for all container ship sizes up to 2,500 TEU peaked in late September/early October and have since follow a sideways path. This positive development had to a very large degree been driven by the installation of scrubbers which takes a substantial number of ships out of the market for about one to two months at a time. By the middle of December for example a total capacity of over one million TEU was temporarily not available due to yard stays.

The segment of 2,500 TEU constitutes, with over 100 ships, the largest category of ships trading in Caribbean/Americas related trades. For Europe to Americas trades, charterers employ almost exclusively high reefer ships of at least 500 plugs. For intra Caribbean/US Gulf, ECSA or WCSA trade about two thirds of the ships are of high reefer specification.

The surplus tonnage which had built up in the Atlantic during the summer due to several Transatlantic service up-sizings had largely been absorbed by the end of the year – either in new European services or by ballasting to the Asian trading area. As a consequence, charter rates for 2,500 TEU ships in the Caribbean recovered a bit and reached USD 10,000 levels again after several ships had to fix low USD 9,000 rates during September and October.

Despite the improving tonnage supply and demand situation, high reefer ships were still barely able to achieve a premium rate compared to standard 2,500 TEU ships and not all ships were able to secure new business with one ship for example having been idle for eight weeks and counting.