News Highlights week: 14- 2023

The ‘FAL3’ continues to turn in twelve weeks with twelve CMA CGM ships of 17,300 – 17,850 teu. It now calls at Qingdao, Shanghai, Ningbo, Yantian, Cai Mep, Singapore, Rotterdam, Southampton, Antwerp, Le Havre, Tanger Med, Singapore, Qingdao. 

OCEAN now offers two weekly connections from Cai Mep to North Europe as the new ‘NEU5’ call adds to the regular weekly calls of the ‘NEU3’ service. 

At Cai Mep, both services are handled at the Gemalink container terminal. The maiden call of the ‘NEU5’ / ‘FAL3’ was performed in late March by the 17,292 teu vessel APL TEMASELK.

GSL revises South China-Vietnam-Malaysia-India ‘IVX’ 

Gold Star Line (GSL) last month revised its fortnightly South China - Vietnam - Malaysia - Eastern India ‘IVX’ service by extending its port rotation to Chittagong in Bangladesh at the expense of South Chinese ports of Qinzhou and Dachan Bay.

The Hong Kong based operator initially launched the ‘IVX’ in December 2020 linking Eastern India, Northern /Central Vietnam and Malaysia. A year later in late 2021, the loop was extended to South China. 

The updated ‘IVX’ service continues to turn in 28 days with two 1,800 – 1,900 teu ships calling at Port Kelang, Chittagong, Kattupalli, Port Kelang, Chu Lai, Haiphong, Port Kelang. 

While the 1,762 teu MTT SANDAKAN performed the loop’s last call at Qinzhou on 17 March, the 1,930 teu KANWAY FORTUNE made a first call at Chittagong on 14 March.

Charter market: the rate rise gains momentum 

Activity in the charter market remains high although the volume of fixtures has decreased slightly in the past two weeks due to a shortage of ships. 

Demand is strong across the board, with the two liner titans, MSC and CMA CGM active on all fronts, including in the sale and purchase market. 

Charter rates meanwhile are now rising markedly for all sizes of ships, as anticipated by Alphaliner in its last report. This reflects in the Alphaliner Charter Index (ACI) which is now, for the first time since June 2022, on a modest but visible rising trend although its current level remains far below the historic peak of March 2022. 

The positive development observed in the market is at odds with the current challenging environment, characterized by low spot freight rates on most routes and a rising pressure on the supply side, with a record capacity of newbuilding tonnage delivered in March. The slow rebound of cargo volumes out of China and a brutal pickup in oil prices is meanwhile adding to the current market worries.

Alphaliner believes that the pressure exercised by the continued influx of newbuilds will inevitably take its toll on the market in the coming months, with a domino effect impacting most sizes of ships. Meanwhile, stalling demolition sales (after a very strong start to the year) are not helping to mitigate the growing risks of overcapacity while it is yet unclear how much extra demand for tonnage the CII regulation is actually generating. 

As a result, Alphaliner remains cautious on the charter market prospects for the coming months and wonders how long the current rally will last. 

For now the environment remains good for non-operating owners who are making the most of the continued short supply of tonnage worldwide, with only seven vessels currently in ‘spot’ position across the globe. But the clear disconnect between the current strong charter market and weak fundamentals could herald tougher times ahead for tonnage providers.

MKT