Analysis of the containership chartermarket 1983-1992: In relation to the design characteristics of containerships

CHARTERMARKET 1983-1992

IN RELATION TO THE DESIGN

CHARACTERISTICS OF CONTAINERSHIPS

Bibliotheek TU Delft

1111111111111111111111111111111111

C

0003813993

ANAL YSIS OF THE CONTAINERSHIP CHARTERMARKET

1983-1992

CONTAINERSHIP

CHARTERMARKET

1983-1992

.

_{IN RELATION TO THE DESIGN}

CHARACTERISTICS OF

CONTAINERSHIPS

"The market is always right"

Prof. dr ir N. Wijnolst

_{Ir M.E.C.}

_Hoek

Delft University Press

Stevinweg 1

2628

CN Delft

The Netherlands

tel.

+ 31-15-783254

fax.

+31-15-781661

CIP-DATA KONINKLIJKE BIBLIOTHEEK, THE HAGUE

Wijnolst, N.

& Hoek, M.E.C.

Analysis of the containership chartermarket 1983-1992 / N. Wijnolst &

M.E.C. Hoek.

-Delft: Delft University Press

.

-

111. -

Lit.

ISBN 90-6275-921-X

NUGI 834

Keywords: containerships ; chartermarket

Copyright

©

1993 by N. Wijnolst

&

M.E

.C.

Hoek

All rights reserved

No part of the material protected by this copyright may be reproduced or utilized in any

form or by any means, electronic or mechanical, including photocopying

, recording or by

Contents

Introduction

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5

Part 1 - Containership chartermarket . . .

7

1

Charterfixtures reports and methodology . . . 7

2

Database structure

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9

3

Chartermarket characteristics 1983-1992 . . . .

.

..

13

3.1

Number of fixtures

13

3.2

Slot capacity

14

3.3

Turnover

16

3.4

Average charterrate

16

4

Structure of the chartermarket

. . . . .

..

.

. . . 19

4.1

Shipsize categories

19

4.2

Cellular and non-cellular

20

4.3

Geared, gearless

23

4.4

Trade route

25

4.5

Major charterers

28

Part 2 - Containership Design Characteristics . . .

.

31

31

32

33

35

37

38

40

41

42

45

45

46

46

50

53

55

57

5

Cellular containerships in timecharter 1983-1992

..

.

.

.

.

.

. . .

.

5.1

Charterrate and

TEU capacity

5.2

Charterrate and

deadweight

5.3

Charterrate and speed

5.4

Charterrate and

fuel consumption

5.5

Charterrate and

age

5.6

Charterrate and

contract period

5.7

Charterrate and

early positioning

5.8

Elasticities of variables

6

Chartermarket index

. . . .

. .

6.1

The objective of a charterindex

6.2

Segmentation of the market

6.3

Charterrate index 1983-1992

6.4

Regression analysis

6.5

Regression equations per segment

6.6

Deviation from average rates

6.7

Charterprice

calcu

l

ation

Part 3 - Ships with above/below average charterrate performance

. . . . .

. . .

.

7

Selection of vessels . . . .

7.1

The approach

7.2

Vessels with relatively high charterrates

7.3

Vessels with relatively low charterrates

63

63

63

63

67

7.4

Selection of ships for analysis

72

Part 4 - Containership

design

recommendations

. .

.

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.

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.

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..

75

8

Analysis of the timecharter descriptions

.

.

.

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.

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.

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.

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.

75

8.1

Composition of the database

75

8.2

Considered

data

75

8.3

Possible ratios

81

8.4

Analysis of the design characteristics

94

8.5

Verification of design characteristics

96

9

Conclusions

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. 99

9.1

Summary

99

9

.

2

The database

100

9

.

3

The

market research

100

9.4

Price correlations

101

9.5

Design charact

e

ristics and rev

e

nues

102

10

Recommend

a

tions.

.

.

.

. . .

.

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. .

..

.

. . .

.

. . . .

.

.

.

..

103

10.1

Information management

103

10.2

Containership design

prescriptions

103

10

.

3 Supplementary r

e

search

103

Appendix 1 - Containerships in

database: main

characteristics

105

Appendix 2 - Charterfixture

s

1983-1992, sorted by containership

.

. .

. .

.

.

. .

..

131

Bibliography

..

.

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..

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253

Introduction

Shipowners, naval architects and shipyards design together containerships, based on their

collective experience from operations, design and construction, rules and regulations, and

the requirements from the chartermarket. Some containerships seem to perform better

than others

,

in the chartermarket, and this study sets out to analyze and understand why.

In the stock-market, a wellknown expres sion is "the market is always right"

.

Translated

to the containership chartermarket, this means that over a long period of time, the level of

the charterfixtures should be areliabie measure for the market appreciation of the ship.

The first question to answer is: "Are some containerships outperforming the overal

market?" In order to answer this question, the market has to be analysed. This First Part

of this study creates a detailed picture of the containership chartermarket, based on the

analysis of some 7000 fixtures over the period 1983-1992. The data were made available

by the Hamburg shipbroker "Mentz, Decker

&

Co. "', based on their monthly charter

fixture reports". We are indebted to them for their willingness to provide this information

and to publish the detailed overview , organized by ships-name. Appendix 1 contains the

main characteristics of the containerships, while Appendix 2 has been composed of the

charterfixtures, sorted by name. The Second Part of the study attempts to establish

correlations between the design characteristics, such as TEU capacity, Deadweight/TEU

ratio and speed and the level of the charterfixtures. After eliminating the effects of

economic business cycles on the level of the charterfixtures, it is shown that a number of

containerships outperform, and a number underperform the market average. These ships

have been selected and studied in more detail. Part Three of the study analyses the two

categories of extremes the best performing ships and the worst performing ones and their

design characteristics. The Fourth and final Part of the study summarizes the research and

formulates conclusions and recommendations. This information could be valuable

feedback from the chartermarket to shipowners and shipyards, bus also to charterers and

bankers.

This research project was undertaken by ir M.E.C. Hoek in the framework of his master

thesis at the Delft University of Technology, under the supervision of Prof. dr ir N

.

Wijnolst. We are solliciting comments from the shipping community on the findings.

Please direct all correspondence to: Prof. dr ir N. Wijnolst

Faculty of Mechanical Engineering and Marine Technology

Delft University of Technology, Mekelweg 2, 2628 CD Delft, The Netherlands

Tel. +31-15-784682, fax +31-15-620620

*)

Note 1:

**)

Note 2:

we have assumed that the data in these reports are correct, and we

therefore decline any responsibility for any errors.

the database is available on diskette under dBASE IV with the

authors

.

Part 1 - Containership chartermarket

1

CharterfIxtures reports and methodology

All charter fixtures are summarized monthly in reports from shipbrokers. These reports

contain a summary of the charters, fixed during the considered month, and their most

important data. There are several shipbrokers who make these reports and send them each

month to their clients, who can thus follow the charterrate developments

.

In a brief and clearly structured way these reports represent the activities on the

containership chartermarket. Figure 1 shows an example of one of these reports.

The chartermarket of containerships is a relatively young market, and limited in volume

of fixtures. However

,

these reports offer the possibility to analyse the fixtures in a

structured way

.

There are few consistent sources of fixture reports in the world and we

were very pleased to obtain the full set of monthly reports from the H

,\

mburg

-

based

shipbroker Mentz, Decker

&

Co. (MDC). Their reports cover the years 1983-1992, a ten

year period with 120 monthly reports. These reports record

,

according to the shipbroker,

approximately 95% of the market.

Based on these reports, a database has been created which contains all the reported time

and voyage charter fixtures. These totaled a number of 6969 records over the ten years,

which is an average of 58 charter fixtures per month

.

Analysis and correlation

A database with this many records is a relaible tooi (considering a scientific approach) for

an analysis of the containership chartermarket. Firstly, it is possible to create an overview

of the development of charterrates as a function of time for any selection of the vessels.

Also, the charterrate, related to a dimensionless index, can be determined for each vessel.

On this basis it is possible to compare objectively the earnings of each vessel. What are

the differences and to what performance indicators are they related? The reverse approach

is also possible. This means that

,

using given performance indicators of the ship, the

charterrate can be calculated. This research should result in correlations between

performance indicators and earnings.

dBASEIV

The database programme used in this study is dBASE IV operated with the use of the

pull-down menu system Assist (Con trol Center, figure 2)

.

This program me offers many

posibilities as a Database Management System (DBMS), including a program ming

language and the building of applications.

The possibilities of a DBMS include easy

sorting, selecting and caJculation of data, which is used very often in this research

project. A disadvantage is the intensive use of the harddisk which increases the run time

.,r='~

_~I .. . " " · ·CAMP"HU--CEH[RAL OELCACO .. .. 2 sl~t.r:J .OEMOCRACY-_0""A05_ .. .... M ... LIA· .. KOSTVEEH a .. .MARINOS 2-.. C.A.P'f. SURVIl.LE-·TACAKA. -ANtMOS--OURMlTOfI.. -MC RUilY--INDEPEt-lOENT CONCEPT_ -CAt.ABU_ ·OORIS-.CALl.tSTO_ -ESTE'TRAOER_ -CERORO_ -ILOVIK_ .. HEV ORLE.u-lS_ -8R480_ -CARRYBQX 1_

Figure 1

COHTAIHERSHIPS rixturu .. 26th-Z8th "uk 1989 (RIt SIOM 1.88 - Pd/OM '.0'5)

,681 '!EU .. M1'O .. SiS .. .. ,seo ctv 16 kn (.".~St .. 1t "00) .. out' CP

, TR),HSATLANTIC Riv -: ~ .. 8/69 _~

1176 TEU - rTT!l - SiS - 25160 dv - '6.5 kn <35.5' laOeSt • }t KOO)

::xt. 12 Mos EUROPE/E.AFRICA Trade .. S H.700 net .. 10/89 .. C.C.M. 960 TEU .. FTrO .. sIS .. 29099 ct" .. U., kn (2'5t 3BOeSt)

6 CONTINENT/INDrAM eCE.\N R/Vs .. S 12450 .. 8/69 .. C.S.C •

956 TEU .. CELtS .. C/L .. 15.00 d.., .. 18 kn ( .. Zt 3BOeSt .. 2. ,t HOO)

[xt. 8-9 H.oa v .... Trade - S 122')0 - 9/89 _ SENATOR 7"6 TflI - f'TI!) - sIs - 22300 dv - 16 kit (2').')t 380eSt-Snol

1S Mos fAR EAST Trade - S 10750 - 9/S9 - CHENC LU:

677 'rEU - FTrD - Sis - 20401 dv - 15 kit (24t 1aOeSt .. 0.7t MOa)

12 Moa ATt.AHTIC Trade - S 10'500 - 7/89 - L.B. I

6'50 TE:U - f'TTO - SIS - 22787 dv -

l'

kit (29t 1eOeSt .. 3t KOO) 1 CONT/AUSTRALlA RIv - S 9000 - 7189 - JOON LINER

S 12.50

S 12.70

S H."1

64' ~~ "~a ~AST7f~STR!~~!9 T~:d; ~a S k9'}á~'~ 1ia~~~)

li

§75~ (~~) Hos} _ 7/6;": ;R~~~l.!~E

6"2 rEU - FTrO - SIs - 17310 dv - 16 ltn 05t 120eSt.3t CO) 12 Ho, TRAHS,\TL,\HTIC Trade - S &32' - 6/89 - OlEAN LINIE

617 TEU - CE!.!..S - SIs - 12798 d.., - 16.' Itn (29t 120eSt .. 2.'St HOO) 2 CONT/S.E.AFRICA R./Vs - S 9000 - 6/89 - K.S.C ..

600 T~ - F'T'rn - SIS - '7"0 dv - 16 kn ,,,,t ;20eSt " .3t CO)

., CONT/HIOOHESlA R/va - S 8"0 - 7/89 _ HAPAC

,}97 TEU - Tno - sIS - 1'5120 dv - U~t 1S0eSt !...Jl..jiOO) 6.' Hos "EO/INDIAH OCE:AH Trad. -C!....1ZîQl-7/89 -L.!::.:..!..J 580 TEU - CELLS - CIL - 622' dv - H kn (17t 120eSt " 1.8t CO)

Ext. S "os nA. tAST Trade - S 5000 - 7/69 _ HEUNC-A

,,,, TEU - CELLS - sIs - 8200 dv - '6 kn (ZO. a ,eOeSt _ ShC) _ our CP

EIt:. , CONT/E.HED RIv - S 8'00 - 7/89 - P .. OCL

'}OO TEU - f'TTO - SIs - 1870 dv - H.' kit (1'5.6t 180eSt .. ShC)

ExC. 1 140& nR EAST Trade _ S 7'}00 - 7/69 _ HAM TAl

472 TEU - fTTD - SIS -7796 dv - H.' kn (17C lSOeSt - ShC)

Opt. 2 COHT/REO StA RIV. - S 68'0 - 7/B9 - fALCON

.c38 rEU - fTTD/Ra.p - SiS - uoo dv - '3 lul (Ht 180eSt - ShG) _ out' CP h t . , Moa H.EU~OPEAN Trade - S 6.c00 - 7/89 _ A.C.L •

.c36 TEU - CELLS - SIS - 66~2 dv - U kn (1~t 1S0eSt • 1.,t CO) Ext. 6 Mos COHTIt'lEO Trade -~ _ 10/69 _ E1.LERH.AH 336 TEU - FTrO/Rup - CIL - 4~OO dv .. 11 kn ('0. '}t }DeSt)

2/1 COHT/C.ANAAY tSl.AND RIv. - OK 80,0 • S 42B2 - 7189 - EUROSTEEl..

'36 TEU - F'TTO .. SIS - 5896 dv - 12 kn (10.H 160eS~ .. te CO)

4-5 Hos UR EA..ST Trad . . . S '250 - 7/B9 -CHINESE

2'5S TOl - fTI'D • SIS - 056 dv - 12 kn (1tt BOeSt ... l t CO) - o~r CP

h t . 1 Mos FAR tAST Trade - S 497~ - i/89 ... A.P.H. .

2.t9 TEU - fTI'D - SIS - 4800 dv - " kn (9t 60eSt _ ShC) , H08 COHT/V.AFRICl Trade - S 4'500 - 7/69 - KAUREL ... PRO"

2" TEU - CELLS - Clt. - ,.c6.c eht - ,., kn (12t 60eSt .. te CO)

12 Ko. IHTEJ:\ MEO Trede - DH 7'00 • S 388' - 7/89 - ZIH

OK • OK • S 12.97 S ,. .59 S _'}.~' Pr!"atl!

c::o:?::E

I 8.62 S ''}.29 S 15.00 S ,.c.51 s '''.61 Prl"et. ~ S 12.74 S _{" .6'} S '9.2B S '8.07 S 16.52

Catalog Tooh E><lt .u'r.QIt'

dJASE I V C Otm/OL CD'fTUI CATALOG: C:~JA~LEREH.CAT

Dala Queries forns RepOrls Wels AppllCl!t!ons

<creote· (cre.ate) 'creale> 'crt!ate) , Cr1!ate>

fllg:

_i!ji*'U3î@1! • •

·.g;t

j

'''' • .ti!I.OO

Dascr I pt! On:

Help:

n

Uso' ...J Data' rz Daslgn: Shlfl-rz Qulck Roport'Shlrt-~ I1onus: fla

Figure 2

while operating. This requires a powerful personal computer system, especially the

harddisk speed is important to have con trol of the operating speed.

2

Database structure

As the containership charterfixtures database consists of 6969 records, each record

contains 9 fields with specific fixture information, while the other 6 fields con sist of the

technical ship information. The database as it has been built is nothing more than a matrix

of which the rows are the records and the columns are the fields. The fields, in an

information

analysis

considered entities, were composed as follows:

Contract information

Date fixed/reported (MM/YY)

This is the month that the

charter

fixture was reported to MDC, generally it is the date it

was fixed.

Contract (FiE/O/R/B)

This database contains the following variety of contracts: Time charter

(F),

extended time

charter (E), option on time charter

(0),

Roundvoyage timecharters (R) and BaIeboat

charters (B).

Period (Months)

The number of months or roundvoyages for which the price has been agreed.

Trade (X,X)

One or two areas in or between which the vessel is supposed to sail during the charter.

Each area has its own one letter code which has been composed especially for this

database:

A.

Africa

B.

A.N.Z. (Australia, New Zealand)

C.

Atlantic

D.

Caribbean(Also N

.

C.S.A

.,

Centra! America)

E.

E.C

.

N

.

A. (East Coast North America)

F.

Europe (North West Europe, in cl. Scandinavia)

G.

Far East

H.

Japan

I.

Mediterranean

J.

Middle East (Also India, Indian Ocean)

K.

Pacific

L.

Sout America

M.

South East Asia

N.

W

.

C

.

N.A. (West Coast North America)

W.

Worldwide

X.

Unknown

Date of the

contract

(MM/YY)

The first month of the contract, whether it is a time charter or a roundvoyage timecharter.

Name of the vessel

This field contains the name of the vessel while it was fixed. Changes of the name during

the ten years of the database have not been taken into

account

as the vessels are not

recorded with their Lloyd's number.

Slot

capacity

(TEU)

The number of places available for putting 20 feet containers in or on the vessel. The

dimensions of one TEU are 20'*8'*8'6" (6.1 *2.44*2.6m) and the height can vary

towards 9'6" (2

.

9m), but this height is not meant by the owner when maximum slot

capacity is given. This slot capacity does not mean th at the ship can carry so many

containers, because it depends on the weight of the boxes and then the slot capacity is

limited by deadweight, the strength of the hatchcovers, the maximum height of the

container stacks and by stability, i.e. the maximum allowed height of the center of gravity

(KG).

Price ($

I

day)

This is the price in U.S. dollars per day which is due during the contract.

It

does not

include ballast bonuses or other exceptions.

Charterer

The company which is a party in the contract and which operates the ship and pays the

price to the owner.

Ship performance information

Deadwei

g

ht (dwt)

Has been defined as:

Dead Weight

=

Waterdisplacement - Weight of the empty ship

The deadweight contains the following w

e

ights:

*

The cargo

*

The bunkers (Heavy fuel oil, diesel oil or gas oil)

*

Lubrication oils

*

Fresh water

*

Food and stores for crew and passen gers

*

Crew, passengers and their luggage

*

Inventory

The maximum deadweight is at the maximum draught

,

given by freeboard restrictions,

while the design deadweight is that at which the design draught and service speed have

been determined.

Cells (YIN)

This indicates wh ether the vessel is cellular or not. Acellular ship has cell guides in the

hold from the double bottom up to the hatches. Figure 3 shows the difference between a

containership with cell guides and one with fittings.

Gear (YIN)

Geared means that the ship has been fitted with cranes and that it has the ability to load

or discharge the containers by itself

.

So the ship does not depend on port cranes.

Speed (knots)

This is the service speed of the vessel, the maximum average speed during a voyage

between the ports at design deadweight. The following factors can influence the service

speed:

lXXi

-'1

/;

"",",.

tr

-'

I

-'

I

~

/

Figure 3

*

*

*

*

Draught

A vailable power

Wind and waves

Dirt

on plating and propeller

Consumption (tons/day)

r

-)(

~

t - - - - ; '---'

-

"'-X

rx rx

I

i?'

cell guides

~

~

V

,

I

I

I

I

I

I

li

I

I

This field contains

the

fuel consumption per

day

while sailing at design deadweight and at

service speed.

Fuel type (HFO/MDO/GAS)

The

number

or word indicates

the highest

viscosity and thus cheapest residual fuel that

can

be

burned

in the

main

engine. Gas Oil (GAS) is

the

light

distiIIate

and Marine

Diesel

Oil (MDO) is the heavy distillate fuel. The others are Heavy Fuel Oils (HFO) and their

viscosity is indicated

in

centi Stokes (lcSt= 1 mm

2

_/s).

The files

The database

contains 6969

records

*

15

fields "" 100.000 datafields and it can

be

used

as a valuable

tooI

for statistical calculations about the containership chartermarket. A

market analysis can

be

divided into a description of the size of the market

or

the structure

of the market. The ship performance information will be

used

to find relationships

between performance and charterrates. The following chapter contains the chartermarket

characteristics over the period 1983-1992, based on the forementioned database

.

3

Chartei'market characteristics 1983-1992

3.1

Number of iIxtures

Tolol number of lixlures per year

~-r---._---

---Figure 4

Fi

g

ure 5

~

r---

---

-

---

---700 -t----===__ ~500 § z '00 JOO 200 100 63 65 66 67 Yeol Number ot lixlures per year Veor 69 91 Q1

18 Ilouod voyoge çhollels

o

hlended IImecl'lO!lets

• Ilmechor1els

First the market size wiU be determined by the number of charter fixtures. The tota!

amount of 6969 charter fixtures will be related to the years. Figure 4 shows the

distribution over the last ten years with the highest number in 1987 and 1988 and again

growth during last three years. In 1990 the number of fixtures was very low, which is

Numb.er of shlps In IImechar1er per year

VItOI

Figure 6

difficuIt to explain. Was it the Gulf Crisis or was 1990 a year th

at

MDC obtained very

few information? Many fixtures for 1990 were made already in 1989 due to the expected

increase in rates. Figure 5 shows the different sorts of contracts, while bareboat charters

and options were exc1uded, because of their low occurance. There were only few

bareboat charters and options are only valuable if they are extended. So only

timecharters, extended timecharters and roundvoyage timecharters

are

considered. The

absolute number of ships in timecharter per year can be determined with the available

data (figure 6).

It

does not take in account the period of the timecharter. The percentage

of the vessels in timecharter out of the tota! number of containerships can be estimated

between 8 and 9 percent during the last three years. A general increase of the number of

ships in timecharter per year can be noticed in the figure. But there is also an even larger

increase of the tota! world fleet. This might be shown even better by comparing the tota!

world TEU capacity with th at of the ships in timecharter.

3.2

Slot capacity

N

Slotcapacity

_L

i=1

CAPACIIT

i

*

PER/OD

i

12

(TEUlyear)

Slol copacily In limecharler

Figure 7

Figure

8

3.lOf·05

I

J1XlE'OS . ! '.lOf·05 ·1·

.

_!

':

:

:1

LOOE.05

t'll

5.COE~(}I .. Ol'OE10) I -I 63 Veor

World conlalnershlp Uee!

350

Veof

(N

=

number of fixtures per year) and is shown in figure 7. The

size

of the containership

timechartermarket can very weil be determined by comparing the total

slot capacity

of the

WOlld conloinershlp fleelln limechorter 12.00'l.

10=

8=

.=

'.00"1.

2=

0.00'1<. 63

..

Veor

Figure 9

fleet in

timecharter

to that of the world fleet [Drewry, 92] (figure 8). After the bad years

for the timecharter market from 1983 until 1987, 1990 also was a

year

with a low activity

in

the

timecharter.

This comparison (figure 9) does not

influence

the

figure

because of the

steady

growth of the world containership fleet.

3.3

Turnover

The annual turnover in U. S. dollars of the containership timecharter market has been

determined

in

about the same way as for

the

slot capacity (assuming there are 30 days in

a month):

N

Annual turnover

L

PRICE

j

*

30

*

PERIOD

j

(U.S.$/year)

j=l

(N

=

number of fixtures per year). The

amount

has grown to 1.16 billion dollar in 1992

and was at its maximum in 1989 at 1.38 billion dollar. The earnings of the shipbrokers

are between 2-4%, which resuIts in

an

annual gross income of $23-46 million. Figure 10

shows the development of the annual turnover.

3.4

Average charterrate

The charterrate development has been determined by the average charterrate of all ships

per period, per month in $/TEU/day (figure 11). The index especially

shows

a dent

between 1983 and 1987 and a partial decrease in 1990. Also compared to newbuilding

prices of containerships the developments are quite closely related.

Tlmechar1er lurnover per yeor S 1.4OO.(0).OCO $ 1.200.(0).00) S UD)'OCO.OCO S 8OO.0:0.0c0 560Hm.cro $4010XHXXJ S 2(Xl(X)J.(XX) so

Figure

la

Avcrage charter rato per monlh

$16.00 --- -- - -- -- - -- - - -- - - -- - - - -- --- -$16.00 SH,OO $12.00 $10.00 $6.00 56.00 $4.00 52.00 --- - --- -- - - -- - -1

$0.00 111111 Hl 1-1 11111-'-1-11-111 H '-lH Hili 1-1-1-1 H IIIH 111-1111IHIIIII-111111111 HI-IIII-I-H-I-H-H-I-H-l-It-IH-I-H-HHH+I-H-1IIIIII-1 1-1+1

~ ~ ~ $ ~ $ ~ g m ~

Figure 11

The movement of the charterrates can to some extent be related to the world economie

business cyc1es. Other relations may exist between the foreign exchange rates, especially

US$ against the D-Mark, as many charter

ships

have German ownership. Figure 12

shows the $-DM relationship. Another factor is the fuel price

as shown

in figure 13

.

As it

is not the objective of this

study

to analyse the mechanics of the

chartermarket

in relation

to the world economy, no further research is made into this direction.

Average charter rato per month in D·Mark

10.00 - - - -.. -.- --... -.. - -.. ---.

5.00 - - - --- - " . " - - - "

000 i 11 H Hlllll H 111111111111111 H 1IIIIIIIIIlH 111-11' I-IIIIIIH-I+II-I-III-I-III'I-I-"IIIIH" 11 H 111111111-H 11 H H 111-11 H 1 i 1111111

;;;

Figure 12

Marine bunker 1uel prlces (Slton) S2S0 S200

~::

"

;

I

~MOO

$150 $100 150 10

..

_"

90

"

92

Figure 13

4

Structure

of

the chartermarket

In

this chapter the details of the market structure

will

be discussed.

4

.

1

Shipsize

categories

Average capaclly ol conlalnershlps In IImechor1er

Yeor

Figure 14

Tolor TEU copaclly In limecharter by size cross

80c00 7COOJ

-'

- - 0 -

-<

500

500TE§

-1(0) JEU - .- 1(00· 1500 TEU - - 0 - - - -> 1500 lEU 1JX1J) -fIJ»J

J

---I\OCOJ ...

I

=

=

IOCOO ~---+---r---4----4---~----4---II----4--~ 85 86 87 88 89 90 Ql n

Figure 15

be observed in the chartered containerfleet. Figure 14 show the average containership size

per fixture per year. This figure is based on 4946 records in the database, which

represent the total number of timecharter fixtures

.

Another way is to show the distribution

of shipsize in turnover (figure 15) and in slot capacity (figure 16). The size has been

distributed into following categories:

*

<

500 TEU

*

500 - 1000 TEU

*

1000 - 1500 TEU

*

>

1500 TEU

Annuallurnover In limechartering by slze cloS$

S dSOOXO)) . S3.nxmJ S = .. .' ... ; ... .: ... . - .- < 500 TEU - - 0 --500· lCOO IEU $= -_ .• - ICOO· 150) lEU ----<>-- > 1500TEU S 1.nxmJ S = -83 84 85 86 87 88 89 90 91

Figure 16

The average charterrate per size class (figure 17) shows that a clear distinction according

to the size of charterrate has developed during the last six years. To compare the specific

average charterrate of each size class they were indexed at 100 in 1983

.

The highest

increase in charterrate for ships occurs in the larger ship categories.

In annual turnover and total chartered TEU slots the popularity of ships in the 500-1000

TEU category is shown in figure 15. The following developments related to earlier years

influence this picture as weil:

*

A recent decrease of the chartered fleet smaller than 500 TEU

*

A very high deviation in the largest size classes

4.2

Cellular and non-cellular

The distinction into cells or no cells shows a higher average charterrate for non cellular

containerships (figure 18). There is a low deviation in this figure and the difference in

Average charferrale by slze class $18.00 ---<5(X)TEU - - 0 - -500 -lOCO rEU --<>--,. 150) JEU 54.00 $2.00 so.oo + - - - I - -- - + -- I - - - - l - - - l - - - - + - - f - - - - I - ---l 63 65 66 67 66 69 91 92

Figure 17

Average chorferrole ($/TEU/day)

$18.00 S 16.00 . $1<1.00, . . . . ' .. .. . . ":. ---. . ~~~~~~"'":""" ~ s 12.00 . . ... ;/ •... ; .. >'lc--.:- -$4.00-'" S 2.00 .. S 0.00 -- - - + - - - 1 - - - - + - - + - - - - 1 - - -1--- - 1 - - - - 1- ---1 63 65 66 67

..

69 91 92

Figure 18

average charterrate of almost $ 2.-/TEU/day is very constant. Average capacity per ship

(figure 19) is more than 300 TEU higher for cellular ships. This category also shows a

higher increase in size than the general size increase due to the economy of scale. To

compare the charterrates the relation with average capacity has to be observed

.

The

cellular ships are generally larger, but they have also low charterrates. While larger ships

are supposed to earn lower charterrates (in $/TEU/day), this should result in few

difference between charterrates when cellularity is concerned.

Average shipsiz& (JEU) In limechOiler 1<XXl 500 300 100 .. . .. ,', ... . 83

'"

85 86 87 88 89 90 91 92

Figure 19

Timechor1ered copocily (TEU) by cellularity

83

'"

85 86 87

..

69 90 91

Figure 20

The chartered TEU capacity and its annua1 turnover are demonstrated by figure 20 and

figure 21.

It is clear th at the popu1arity of ce1lular ships is the highest during most

years

Tlmechartered !urnover by cellulority

$==

I

))

$=

' /

'

.

.

.

.

$=E

'

~t

~

'

//

$ 1 = $0 ~1----~--~---4----4_---+----+---~ $ 1lOOXXXXXl • .~. $ 7 =

$=

$=.

_{$<1OCIX'(llX)} 6J 85 86 67 88 8. QO

.,

Figure

21

4.3

Geared, gearless

Average charferrole (${TEU/day)

SI8.oo . S 16.00 S '4.00 S 12.00 S6.oo S·1.(O $2.00

-So.oo -·---l----I---__+--~I-jI---4_-__+---_l_--_1

6J 8d 85 86 67 88 8. QO

.

,

"

Fi

g

ure 22

Another distinction can be made by the presence of gear

for

loading or discharge. The

advantage of the containership with cranes is the flexibility in under developed ports and

possibly when there is a strike

in

port. This can be made possible at the co st of a higher

Average shlpslze (rEU) In limecharter

:

j :

.

.

..

.

.

.

.

:

GOO • ~._~.~ •

.

---

.

500 . '00 200 100 o· -~4---~---4----;----4----+---4----+---~ 83 8' 85 86 87 88 89 91 92

Figure 23

weight of the empty ship

.

Cr

a

nes can also be an obstacle for the terminal gantries. The

average charterrates (figure 22) of these two categories stay very close to each other, so

the charterrates have to be compared to shipsize. The average shipsize (figure 23) of the

self sustained containerships in timecharter is growing constant! y, but that of the gearless

ships is growing faster. Generally the gearless vessels have higher charterrates, also

recent!y, as weU as a higher capacity. A difference of approximately $1.-/TEU/day

between a gearless and a self-sustained ship with the samecapacity is at the safe side

.

Timechorlered capocity (JEU) by geer

750000

·

·

_:

·1

··

··

·

_:

\·

····

_:

··/

·

·

_:

~

_,; : • ·/:~ .. ··············:········ 100000 /~: ::

~b ~

,

·

150000 83 84 85 86 87 88 91

Figure 24

Figure 25

Timechartered lurnover by geor

s = s = S 7<XXXXmJ S = s=

.•••

1\lJ

-

-

I

-

-

-

.

:=

.

~:

-

"/

:

...

_-

-

-.~

::

::

t:

~

.

....

...

.

..

.

.

..

.

...

.

83 65 86 67 88 69 90 9\

The market, divided into geared or gearless ships, has primarily been dominated by the

self-sustained containerships (figure 24 and 25). The dent of 1990,

especially for the

gearless class, shows a resemblance with that of the cellular containerships. The market

size ratio gearless/self-sustained stays very constant during the years.

4.4

Trade route

A very important division has been based on the trade area, while trying to cover all

areas but at the same time limit the number of routes. In the database the field Trade

exists of two areas between which the ship is supposed to sail during the timecharter. A

selection of the area can be made by selecting the trades containing one of these areas. A

disadvantage of this approach is the fact that in the determination of annual tumover and

of chartered slots the amount per area categorie will overlap.

The areas have been

condensed into eight categories as follows:

*

Asia

*

Australia

*

Africa

*

Europe

*

Middle East

*

North America

*

South America

*

Worldwide

The average shipsize in TEU (figure 26) is the highest for worldwide trades followed by

trades in or to Australia. On the contrary, the average sizes of the timechartered

containerships in Africa and Europe are the lowest. And the average charterrate (figure

Average shlpslze per orea creU) Ió(() IACO .-.•..•.••••••.•••••.••••••.• -120)· - -- AflIeo - - - 0 -Asla - '- Ausholo - -Europa - -Mlddle Eosi - - -SovIh Ameflco - 0 - -Worldwlde .... .. ... SJ 64 85

..

_"

68 89 90 91

.,

Figure 26

Average chor1errale by or90 ($/TEU/doy)

S 18.00 $ 16.00 - -- Ahlco S 14.00 . . .. , •.•.. ", ... , ..•••. --o-Asio - '-AuslfoWo - - - - 0 - -Europa S 12.00 . • .• ' .••••• ,', •. - . -MIddie Eos' ----6--N()I1h AmerICo S 10.00 _ .- Soulh Ame.lco - - 0 - -Wodclwlde S 8.00 S 6.00 + - - - 1 - - - - 1 - - - - 1 SJ 84 85

..

87 68 89 90 91 92

Fi

g

ure 27

27) is lower when the average

ship size is higher and vice versa.

The fact that these are

related has been demonstrated. The causal relationships are difficult to establish.

On the other hand the amount of sIots (figure 28) and the annual turnover of the

timechartered containerships (figure 29) is the highest in Europe, followed at areasonabie

distance by Asia. The worldwide timecharters had their peak in 1987, but since then they

have only decreased.

Tolol Hmechorlered capaclly per area (TEU/yeer)

,=

,

=

IOCOOJ 63 85 86

"

..

8. 9()

Figure 28

Tolollimechor1ered onnuollurnover per meQ

63

..

85 86 87

..

8 • 9()

Figure 29

.,

.2

.

,

.2 - e- Afrlco - 0 - -Asla _ . -Ausholio - - 0 - -EUfopa - 0- Mlddle Eosi - 6 - -Norlh AmerIco _ .- Soulh AmerIco - - 0 -Worldwlde - -- AI/lce - - 0 -Asla - '- Auslrolio - - 0 - -Europe - 0- MIddie Eos! - -Nonh AmerICo _ .- SouIh AmerIco - - 0 - -WOfldw1de

4.5

Major charterers

To make a division of charterers in the market the five charterers with the largest

timechartered fleet have been selected:

*

Mrersk Line (A

.

P

.

M011er)

*

Nedlloyd

*

Scandutch (A participation of C.G.M., E.A.C. and Nedlloyd, terminated in

1991)

*

Sealand

*

ZIM

Average shlpslze per charterer OE U)

120) .. __ J •• •• ••• ••• • ••• , •• •• • - --A.P.M. - - - 0 -Nedloyd _0- Scondurch ---<>- Sealond -.o- ZIM

Figure 30

Many of

t~ese

charterers belong to the top

20

liner companies

.

The development of the

average shipsize (figure

30) in timecharter per operator shows a very high variance.

Sealand which is active on the Atlantic and the Pacific and charters

larger

ships than the

other companies. Sealand also pays a relatively lower charterrate, because of the higher

average size (figure 31).

According to the most recent figures, Mrersk and Sea1and have the largest timechartered

fleet (figures 32 and 33), which has grown that way during the last two years. Mrersk's

chartering activity was least influenced by the dent in

1990.

Average charterrole per charterer ($/TEU/doy)

::::

1

·

···

·

··

·

·

.

.

...

...

.

.

.

.

. .

S 14.00 - .••••••.••••••

Sl2oot~'

.

....

•

.

.. /)

S

10002,

--.... ·.: .. : .. :

.. :

···

M

.

:

-:.::::=:::=

:---:

.

- -- A,P.M. - -0 - Ned'oyd _ .- Scondulch

..

.

.

~

. . . ...

:

.. . S 8.00 - - - - 0 -Sealond - -O- Z'M S6.OJ $4.00 S 2.00 som +---+-- - + - - -+---+--- +---+---+---+---1 83 85 86 87 88 89 91 92

Figure 31

Tolalllmechar1ered copoci!y per charteler (rEU/yecr)

JlOOJ - -- A.P.M - 0 - -NedRoyd - -.- Scondulch - - -Seolond - '- ZIM

Figure 32

Tolallimcchot1ered onnuallurnover per charterer ($tyem) S I20CXXHXO _ e_ Moersk --0---Nedlloyd - .- Scondulch - - S e alond ~-ZlM

Figure 33

Part 2 - Containership Design Characteristics

5

Cellular containerships in timecharter 1983-1992

To what extent do the containership design characteristics influence the charterate, is the

critical question in this study. The answer to this question is first of all limited to the

fully cellular segment of the containership that operates in the timecharter market. In this

chapter many relationships between the relevant ship-parameters and the charterrate win

be shown.

It

should be borne in mind that the market is made up of two players, the

shipowners and the charterers, with the shipbrokers as intermediaries.

The behavior of the owner will be described as maximizing his return on investment:

Charterprice - (Operating casts

+

Capitalcosts)

Investment

by maximizing the charterprice against the lowest investment and minimum running costs

(i

.

e

.

operating costs and capital costs)

.

Charterer

As the charterer wants to fit a chartered containership into a certain service his behavior

can be considered as more complex. The special design characteristics of the ship to

fulfill the service demands are the following:

*

Capacity (TEU)

*

Dwt/TEU ratio

*

Speed (knots)

*

Reliability

*

Trade route

With these demands fulfilled the charterer wants to achieve them at the lowest cost level

per TEU, so he should minimize:

Charterprice

+

Voyagecosts

+

Cargo handling costs

TEU

by minimizing chartercosts, voyage costs and cargo handling costs.

This behavior is responsible for the price correlations between the charterrate and the ship

characteristics. These are best represented by means of scatter diagrams. Based on these

diagrams the best fitting regressions will be made.

5.1

Charterrate and TEU capacity

Cellulor conlolnershlps In IImechorter (1983-1992)

2~.----,----.----,----,----.----.----.----.----.----,

Figure 34

~1----+----1----+----+---~----~---1----~ 200 400 800 HXXl Shlpslze(TEU) 1200 1400

CeUulor conlalnershfps In IImecharter (1983-1992)

800 1(XXl Shlpslze(lEU) 1200 1400 1000 1000 1800 1800 2(lXl

TEU capacity is the size indication of a containership rather than its deadweight. That is

also the reason why charterrates are represented in $/TEU

.

The dimension is the number

of slots on board of the ship, which are the places suitable for the stowage of 20 foot

containers. Up till now the assumption is that the capacity is the most relevant factor

influencing the price level. This could be seen in figure 17, where the structure of the

market by size shows the average charterrate by size

.

Especially in the last six years the

charterrates of the different size classes were really differentiated from each other. Scatter

diagrams of charterprice and charterrate against shipsize in TEU are shown in figure 34

and 35.

5.2

Charterrate and deadweight

CelluJar containershlps In limecharfer (1963-1992)

40c00,_--,----,----,_--,----,----,_--,----~----,_--, 3~~---r--_+----~--~----+----~--_r--_+----·~--~ 3OCOO ~---\---_+----~--_r--_+----~--_r---' •. -.~

'. T

:-:-.!i 2500) ,- -- - - j - - --I- ---I---II-~.::...+----+~···.· .,

~~r---i

:

: .' .

.

.

.

. .-;.;

i:~~\~:'

-:-

'

.' ..

-.

..

. :.

"'~:::'"

h

·

.::~~

....

1(00) ~----+'--.

-

l1'.!

ii

c.~r

' ..

~

...

~,~---I----+----~---I---I

~ ~--.-I:-~r::,~:'"'· -:..

i

,t:,;If"',:·!:lll:I

__

__

~

---

_I_--_4

----

+_

--

_I_

--

_4

--

--+_

--

__!

200 lOCO '200

'

''''

'000 16CU 20Cû

Shlpslze (JEU)

Figure 36

In many other ship categories than containerships the deadweight is the most important

shipsize indicator as wel! as a design requirement. For charterers deadweight is mainly

relevant on special trades where the average weight of the containers (in ton/TEU) is

higher than the industry average of 12 ton. An example of this is the South America to

Europe trade, where containers may have a weight of more than 14 ton. But deadweight

also includes bunkers, so the sailing range could be limited by deadweight as bunkers are

deducted from the deadweight capacity. As deadweight has astrong relationship to TEU

capacity (the larger the ship the larger the number of slots, figur

e

36) this is the most

important reason why an increase in deadweight results in a higher charterhire. The high

variance in the scatter diagrams (figur

e

37) can be caused by a wide range of trade areas,

like the above mentioned example, and also a wide variety in speeds

.

The latter has a

complicated r

e

lationship and can be seen from fol!owing point of view: A higher

deadweight generally results in a higher block coefficient and a higher resistance

:

a larger

engine has to be installed and the consumption, i.e. the voyage cost

s

, will increase.

Figure 38 shows a scatter diagram of DWT/TEU ratio and the charterprice. The highest

charter earnings are achieved by ships in the range of 13-18 ton/TEU, the maximum at

Figure 37

Figure 38

Cellulor confolnershlps In Ilmecharfer (1983-1992)

20000,---,-- ---,---,---,,---,---,---,

,----

--,

XOOO·~----~----~---+_----~----~-:--·--+_._~_r----~ 1<XXXl 15(XX) 2<XXXl Shlpslle (own

"

,5(XX)

Cellulor conlalnershlps In Ilmechorter (1983- 1992)

35(XX) '0000r---.---.---,---.---.---,---r----~ 2<XXXl·I---r---1---:,~,~~~---1---·~----~---_1 10000+---~-I~~----t--~·--:fr·'c~tU-~----~---+_----~---_4 I(XXXJ + - - - . + - - - , - I-·;I .. ·~I 5(XX) +---·+---.01··-'11'11 0.00 5.00 lom 15m 20m DWT/TEU -,0110 'sm lOm 35m "'.00

about 17 ton/TEU. A histogram

.

shows the distribution of the number of timecharter

Hislogram of OWTfTEU· ralio (1963-1992) 450 350 300 250

Figure 39

5.3

Charterrate and speed

Cellulor conlalnershlps In Umecharter (1963-1992)

Speed (knoIs)

Figure 40

Service speed literally means the maximum velocity that can be reached by the ship at

maximum deadweight. There is a relation between speed and charterprice (figure 40). The

elasticity of the relationship between speed and charterrate is negative, which means that

charterrate decreases with an increase of speed (figure 41). The other relationship in this

Cellular conlalnershlps In Ilmecharter (1983-1992) ~m'---'---~~--~--r---I---~---r---'

I :

25.00 t---_+_- -- -.--t-! ----~+----_+---t---_+_----__I

~

20m

+--

----

-+-

--

".

-

.

;

.--

j

-'

j

...

---t---

--+----

--+---I---

-j

~

I

,.1

,.1

.

'; 15.00

1

-

~I

-I~I--I--I--.

--:-

I

+---+-

- - - + - -

--1

1

_o

,

I

I ,

_{,1._} I.

J! "

1

₁₁

:1

I.' 1 I '.1 I I •• . ' •

I .",

6 lOm

i

prT-;lrl

-

I

-

;

-

,rn~n·T-:T:

5.00

+----t----l;

-

i f T

1-4-'-'

--LI--:""

- :,- + - -- -1 0.00 +-- - - --I---+---l---l---+---l---I 100 12.0 1<0 IM Isn 200 220 24.0 Speed (knoh)

Figure 41

situation is that the speed of the vessels

is

higher with a higher deadweight. Generally

larger ships sail at higher speeds.

5.4

Charterrate and ruet consumption

CeUulor conlainershlps In IImechor1er (1983·1992)

,~ ., - - - ,- -- - - - -r- - - -, - - -- - - - , -- - - , - - - -- -, -- -- -- , xooo+---~I---_+~-'~._'·-r---r_----~---r----__1 -g-~ 1~·I---~~I~--~~-·-!1r~;~-·--~----f_r_~---_f---_r----~

.

l

~ 1tXX)) '1 - - '--+' u 0.0 20.0 <0.0 /D.O eo.o 100.0 120.0 I«lD

fuêI consumpllon (Ion/dey)

Figure 42

CeUulor conlalnershlps In IImecharter (1983-1992)

1<0.0 . -- - - , - -- - - - , - - - -- -, -- -- -- - ,- - - , - - : - - - , -- - - -- ,- - - ----, 120'O+---r----~---+---r----~---~---~----~ >. 100.0

~

g eo.O I---+ ---I---i---+---.:..-f--cc----t-'---r---. --~

I

WO

+---

---r

----

-f--

---t-

--

.

-

.J

'

~

~

~.I---

.

-

-

·

·

---l

.I

---

~

----

_t

;;

. ..

.

: 'J. '::.

ti"::."

l ~ 40,0 . ..~;.:l ~ .. :;:: .~' ." • . L"'---':--!--- - -I- -- -1 • " ... :~~.l'r~ .f!", •• , .: •

Fi

g

ure 43

20.0 1--:-•• -, ...

-

.1s.'!~

+

.

-'o

if.j::l:1

lf~

:f'"

'

·

~

·

-"-

·

0.0

+---+---4----!---I----I---I----+----I

10000 I~ xooo Shlpslze (DW1) 3~

Voyage costs are mainly determined by fuel consumption, port and canal fees and cargo

handling costs. For the operator th

e

choice for the ship determines both the charter costs

and the voyage costs. By making the optima! decision in this matter the charterer intends

to minimize the sum of these costs. The larger the consumption in ton/TEU/day the lower

Cellulor contolnershlps In IImechorter (1983~ 1992) 140.0 - r - - - - , - - - , - -- , - - - ,- - - - , - - - - , - - - - , I~Dt---~----t---+_--~--~---+_---1

!

~l00D,---_r--~---+_--_r--~~--+_--~

I

_g &J_. O _{I---~---+~--~--~---+-~-~--~} ~

. I

I , 000 -t---_r--~---+_--_+-.I-.-.-.-!---_+--__I ~

.

• t

1i • ' . ' • ii 40.0

~---+---__t-'

:

-

:

-

..

~;

;-;

+;,

---'-_+---+----1

•• , • I ! 1 •• ' j ' • • : • • I

I-

r; I · ~D ~---I--·--'--.-i-:-·-I-'-I-,-:--+'---~---+---1 i

!'I

i

I ' •

1

o,O

.

~-

-~i~-·

-

·-4i---+_-

-

~--_4

-

-

-

+_--~

10.0 12.0 14.0 16.0 18.0 ~,O 22.0 24.0

Speed (knOI$)

Figure 44

the charterrate

.

A ship that has a higher voyage cost level (while other properties stay at

an equal level) shall have a lower charterprice

.

The relations between consumption and

charterhire, shipsize and speed are shown in figures 42, 43 and 44. The difference in fuel

type has not been taken into account. The diagrams show amore or less positive

correlation, while a third power equation in the relation between speed and fuel

consumption can be discovered.

5.5

Charterrate and age

The relation found between the age of the ship and the average charterrate only deals with

ships at this moment still in charter (figure 45)

.

The figure shows a large variance during

the first years due to a lower number of ships built in this period. For the behavior of

charterrates of ships related to their age, their are three possibilities of relationships:

*

A low co st ship could result in a low charterprice

.

There could be a theory that a

vessel with low capita! costs and low running costs, could reach lower charterhire

levels than more expensive ships. Therefore the average charterrate of a ship built

in a cheap period

,

in this case the period between 1983 and 1987 (figure 46),

should be lower

.

This figure also shows that the newbuildingprice development has

*

*

the same curve as the charterrate development.

There is no relation between age and charterprice as long as the age of the ship

does not influence its performance.

The younger the ship

,

the better the performance

,

which makes a higher average

charterrate possible

.

As can be seen in the figure there is little evidence over the years that supports the second

proposit

i

on.

Figure 45

Figure 46

18.00 16.00 . 14.(X) % ~ 12.00

.

Ö 10.00 ~ ~

.

8.00 ~ 6.00 ~ 4.00 . 2.00 -0.00 . Conlalnershlps In Ilmechar1er In 1992 70 71 72 73 75 76 77 78 79 80 81 62 83 84 85 86 81 86 69 ÇQ 91 Q2 Yearbulll

Newbuildlngprlce of 0 2500 TEU conlalnershlp

25.00 20.00 -~ 15.00 ~

.

~ 10.00 5.00 0.00 ~--4----~~----+---~I----+----~--~---~ '9 60 81 62 83 85 86 87 88 69 Ol Yeaf

5.6

Charterrate

and

contract period

150ll ICXXXJ

Figure 47

30.00 '25.00 20.00 15.00 10,00 5.00 0.00

Figure 48

Cellulol conlolnershlps In Umecharler (1983·1992)

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Cellulor conlolnershlps In IImechorter (1983·1992)

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.

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.

1 -30 35

A statement,

based on supply/demand behaviour in a

market

of full compehtlOn

,

is that

most charterers charter long term with low rates,

while shipowners charter long term with

high

rates. While the variance is very

high

,

figure 47 in fact shows long term

timecharters at average charterprice at less variance compared to short term timecharters.

The long term timecharters go with low charterrates (figure 48), on which the assumption

can be based that long term timecharter fixtures generally consist of large vessels

.

5.7

Charterrate and early positioning

3000

I

2'

~

t

'or

t

I

'

t

10.1'

I

'.00

i

I

I

I I

I

I •

Cellular conloinerships In Ilmechorter (1983·1992)

• I

I •

• I : I

~re~---+---+---+---+---~----~

.,

10 15 20 25 30

flldure reporb In odvonce (monrhs)

Figure 49

Another important matter in fixing timecharters is the difference between the date of the

fixture and the date of the beginning of the contract. When charterers take early positions

this difference in months is very high. A question can be

:

What is the relation between

the charterprice and the early positioning of the charterer? Figure 49 shows a scatter

diagram of charterrate against the fixtures in advance. Due to the low number of large

vessels (in general with a low charterrate) these ships will be fixed early in advance when

it is possible. This should be an explanation for the low charterrates at very early

positions. The fixtures with negative early positions were reported after the contract had

started.

5.8

Elasticities of variables

As a result of the search for correlations between the above mentioned numeric variables

and the price

,

the elasticities between the variables can be determined. This does not take

into account any linearity or non-linearity of the correlations. The elasticities are

summarized in following tabie:

Charterprice

Charterrate

($/day)

($/TEU/day)

Capacity (TEU)

₊

-Deadweight (DWT)

+

-Speed (Knots)

₊

-Consumption (ton/day)

₊

-Age

0

0

Contract period

₊

-Early positión

0

0

The figures 50 and 51 try to represent the non linear correlations to the price and also

their mutual correlations, which makes it complicated to oversee which are the

independent variables.