Howe Robinson Container News

Plunging rates for chartering container vessels that carry consumer goods means a slowdown and losses for shipping lines in what is traditionally their busiest time of the year, according to a report on Bloomberg.com. As reported earlier today on MarineLink.com, MOL has revised its FY2011 downward, projecting a revenue drop of 6.3% from previous guidance. According to the Bloomberg report, fees for hiring vessels have fallen 9.3 percent since the end of April, citing the Howe Robinson Container Index. Last year, the index surged 56 percent in the period, as lines added ships on demand from U.S. and European retailers restocking for the back-to-school and holiday shopping periods.

Early last year, “experts” were warning of a prolonged slump in the box trades, fueled by reckless over-ordering by irresponsible carriers and shipbuilders offering special deals on price. Howe Robinson's Container Index had sunk to a low point of 451 in January and leading liner company executives were attending hastily convened crisis summits to discuss possible lay-up schemes and other short-term survival strategies. Less than two years on, the market has paused briefly for breath after what brokers describe as an unbelievable recovery, both in its scale and speed. Last week's Howe Robinson index was just over 1104, slightly down on the previous couple of weeks but nevertheless attained in a consistent climb that, until now, has seen no breaks.

As a range of container ship charter indices reach their highest ever levels, the inevitable question must be, how long can this bull run last? Container ship charter rates have reached highest ever levels across a broad range of sizes with Howe Robinson’s container charter index edging up further this week, to another record of 1571.5. According to the broker’s second quarter container charter market review, “doubters have questioned the sustainability of the charter market since it started to move upwards in January 2002”. In that time, its index has spiraled by almost 250% - from 450.

There is certainly no let-up yet in the containership ordering spree as charter rates scale new heights, carriers continue to report record results. The Howe Robinson Container Charter Index has climbed to a new record of 1588.4, up by just over 252% since its January 2002 low point of 451. Records are being broken on a weekly basis as liner companies extend their investment programs, ordering new and ever larger ships many of which will not now deliver until 2007 or 2008. Among leading lines believed to be contracting or at least discussing new tonnage in recent days are CMA CGM, Evergreen, Mitsui OSK and Orient Overseas Container Line.

As Howe Robinson’s Container Index smashed through 1750 points this week, leading container carriers announced yet another round of new orders, leaving analysts once again torn between jubilation and concern as they struggle to understand mad markets and which way they are heading. Amongst new contracts reported this week is an order for the first super post panamax container ships to be built in China. China Shipping Container Lines is continuing its dramatic expansion with an order for four, option one, 8,500 teu container carriers at Shanghai’s Hudong-Zhonghua shipyard, a division of the China State Shipbuilding Corporation. With a length of 334 metres and deliveries of the $93m-plus ships scheduled for the last quarter of 2007 and 2008…