COSCO accepts to pay the highest charter rates when hunting for container ships

A container ship of COSCO shipping line (Photo: COSCO)

 
As the container ship rental market in the last 12 to 24 months has almost no ships available, shipping lines are taking the last resort of hiring new vessels.

But at the same time, they are also anxious to protect the ships they have locked in from belligerent adversaries by actively opening early renewal negotiations.

Shipping lines MSC, CMA CGM, ZIM and COSCO competed in trying to reach the top shipowners with very high charter rates for 36 months.

According to Alphaliner data, China's state-owned carrier - COSCO - has agreed to lease no fewer than eight new ships and five renewals in the past few weeks.

The charter contracts, ranging from the 1,296-TEU Trader to the 4,957-TEU Jogela, are almost entirely fixed for 36 months, thus ensuring that these vessels will remain in COSCO's fleet for the foreseeable future and are important. It is important not to be poached by competitors.

Alphaliner said: “This fixing spree follows a wave in June, which saw Cosco fixing and extending six classic panamaxes from Navios for periods of 36 months in the low $40,000 a day level.”

The consultant noted that COSCO has also renewed two Costamare-owned vessels, the 9,469 TEU post-Panamax fleet consisting of Cosco Guangzhou and Cosco Ningbo, for a period of 36-39 months at a charter rate of $72,700 a day.

Previously, COSCO shipping line paid US$30,900 a day for the COSCO Guangzhou vessel and for a period reduced its charter to US$16,000 during a period of excess capacity in 2017.

COSCO's closing operations are perhaps one of the 'last hurdles' for carriers in their quest to secure more ships, as any vessel with the capacity to operate this year, and the next year will be hampered by longer charter periods and shorter delivery times according to the market, especially in the past six months.

One broker told The Loadstar he has "mixed feelings" about how the container charter market has evolved.

He said: “It has been a great buzz concluding these deals and, with our charterers telling us to ‘fix anything that floats’, there has been very little delay for subjects from charterers for vessel suitability or inspections.” And, “What I worry about is what we are going to do for the next year or so with container tonnage availability all but wiped out,” he said.

This also means that there is nothing left on the container charter market to accommodate any special requirements. “The carriers with big bucks have taken everything off the market, right down to the smallest feeder, and we can barely cover our commitments,” he said. “And now owners are asking us to agree new long-term extended charter deals at vastly inflated hire rates.”

Source: Phaata.com (According to The Loadstar)

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