Almost destroyed as a financially viable shipping segment four years ago, classic panamax boxships are back in the big time.
With charter rates storming back across all box sizes this month in line with the record rates liners are enjoying on many tradelanes, it is the much maligned classic panamax that stands out as the biggest winner.
At the end of August, the six to 12 month rate for a 4,400 teu ship had increased by 45% month-on-month to stand at $15,250 a day, representing an increase of 11% since the start of the year, according to data from Clarkson Research Services.
Overall, the basket time charter rate index for boxships is up by 20% month-on-month, but still 8% below the start of the year, Clarkson data shows.
Alphaliner reported last Wednesday that rates for classic panamaxes had risen by up to 40% “virtually overnight”.
Among the winners from this leap has been hard-pressed Pacific International Lines (PIL). The Singapore line, which has been in dire financial trouble for the past 18 months, has managed to fix a brace of 4,250 teu ships at rates in the $13,000 to $15,000 bracket this month.
With the opening of the expanded Panama Canal four years ago, classic panamaxes became an endangered species at risk of obsolescence. One in two boxships scrapped in 2016 were classic panamaxes, including ships as young as seven-years-old.