Charter rates for boxships have hit an all-time high and are expected to remain strong for some time yet. The Hamburg and Bremen Shipbrokers’ Association’s New ConTex index rose 2.3% over the week to a historical high of 1,350 points. That follows “a paradigm shift” towards fixing for longer charter periods of 24 to 36 months, which have become the “new normal” for larger ships, according to a New ConTex note.

The surging market has also lifted the Howe Robinson Containership Index (HRCI) to 2,133 points. That takes the HRCI through the 2,000 barrier for the first time since 2005. It beats the previous all-time peak of 2,093 set almost 16 years ago in June 2005. The record-breaking rates come as no surprise, said analysts. “With the ongoing and drawn-out demand recovery from the pandemic being met with an ever-dwindling supply-side, rates were only ever going in one direction,” shipbroker Howe Robinson Partners said.

Rates have been pushed to their new highs by a series of impressive fixtures, with some of the biggest weekly rises taking place in the past month. The increase is led by the classic panamax sector, where six to 12-month charter rates for a 4,400-teu vessel stand at $50,000 per day, on a par with peak levels seen in 2005, according to assessment by shipbroker Clarksons. The speed with which the market is rising means even this level may have already been surpassed.

The 5,060-teu Heng Hui 6 (built 2004) is said to have been fixed for 60 to 80 days at $58,000 per day to France’s CMA CGM. There is also market talk of a 4,300-teu vessel taken at $70,000 for a short period. In the smaller sizes, new records are being broken as vessels are fixed for longer periods. Israeli liner operator Zim has booked the 3,534-teu Bach (built 2009), which is controlled by UK-based Borealis Maritime. The vessel is said to have been fixed for three years at $31,250 per day, said brokers. That is the first three-year fixture to break the $30,000 threshold for this size. It is more than four times the rate of around $7,500 per day that the vessel has earned for the past 12 months.

Fixtures of larger vessels, meanwhile, have practically dried up due to the dearth of vessels. The only reported deal for larger vessels this week was the 6,627-teu CMA CGM Berlioz (built 2001), which was taken on extension by France’s CMA CGM for four years at $38,000 per day. Tonnage providers are increasingly confident that the capacity crunch and high earnings are set to continue for some time yet. Global Ship Lease (GSL) executive chairman George Youroukos pointed to expectations that the smaller and midsize containerships receive a disproportionately higher boost from decarbonisation measures. Speaking at a recent conference call on 10 May, Youroukos said the container fleet would shrink as ships are forced to slow down. He said the non-eco fleet would need to slow to meet the International Maritime Organization’s rules on Energy Efficiency Existing Ship Index, or EEXI, which enters into force in 2023. That would effectively shrink the boxship fleet by six to 10% and would result in negative fleet growth.

That scenario makes it very difficult to envisage a set of circumstances on the supply side that would really derail the market, added GSL chief commercial officer Tom Lister. Larger containerships are regularly being taken for three to five years, said brokers. Larger feederships and eco-vessels are being fixed for two to three-year charters, while smaller standard feeders are going for two-year periods, according to Howe Robinson. The shipbroker has also outlined key differences between today’s market and when the containership charter market last experienced a bull market some 16 years ago. “June 2005 marked a turning point for the market, as enquiry had already slowed, periods were falling and the ominous presence of a monster orderbook was already shaking the confidence of market participants,” Howe Robinson wrote. “Today’s surging rates, expanding periods, desperate demand for ships (with little respite until at least 2023), along with high freights, bumper liner profits and a supply chain creaking at the seams, suggests anything but a change in direction for the time being.”