Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 5
Yes, all that is possible and I certainly hope so.

But there are two downsides to keep an eye on beyond just charter rate reduction to match prevailing rates

1. That ships are unable to find charterers and so are laid up and unemployed generating zero revenue whilst the owner must still cover crewing, maintenance, lay up costs and all the rest. With the continuing downturn in shipping market, layups (ie unused ships) of the entire global container shipping fleet are forecast as below to reach 5%. Yes, it's just a forecast. Normally, the figure is less than 1%. But historically, in the last liner shipping market crisis in 2009, nearly one in nine vessels was laid up. With layups increasing already due to less trade and oversupply of vessels, owners are naturally cutting charter rates to avoid this scenario and at least keep vessel in employment and so it becomes a vicious circle.

How bad can it get ? Well there were some containers shipping lines that started up during the crisis, because owners were prepared to charter their vessels to them for next to nothing, giving them a huge cost advantage in some cases . Why ? Because the owner is spared the costs of layup (not just a case like parking a car in the garage), running maintenance and the like that are part and parcel of charters.

Which leads onto second point

2. That charter rates can very well go way below what they are at the moment.


Layups after peak season to reach 5%

Tuesday 20 September 2011, 10:24
Containers Back to Lloyd's List Asia .UNDER the best case scenario in the current economic climate, 5% of the global container fleet will be in lay-up by winter, says a new report.Macquarie Bank Hong Kong shipping analyst Janet Lewis predicts that the layups will start in the slack season that usually begins in November after


The market has yet to hit bottom so it's anyone's guess at the moment. One thing that heartened me was that Paragon do seem to report any changes to charters, so it would be appear Boxships would do the same. Hence, no news may very well be good news at the moment !
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.