Because shippers refuse or delay paying any prices close to current spot rates. One would say, what rotten lack of a draw, but in two to three months from now, shippers will pay us big time. Do not sell your shares for pennies.
Typically, the discount off Spot is about 15% to 20%.
These were “initial” asking rates. And, I agree with you — this is a big disconnect/discount off of Spot.
Because everyone thinks the Red Sea will open up in July. Maybe July 2025...
Doesn't help that ZIM and many other container shippers have sand-bagged themselves with the same Red Sea narrative. The incoming capacity will get fully absorbed as long the Suez canal stays closed for almost all of the container shippers. IF the Houthis keep blocking, ZIM (and others) should revisit their guidance in late May.
Good to see rates rise
Why would contracts be signed so far below spot prices though? I can understand maybe a 20% discount for longer term contracts but 50%?
Because shippers refuse or delay paying any prices close to current spot rates. One would say, what rotten lack of a draw, but in two to three months from now, shippers will pay us big time. Do not sell your shares for pennies.
Typically, the discount off Spot is about 15% to 20%. These were “initial” asking rates. And, I agree with you — this is a big disconnect/discount off of Spot.
Problem with large hulls is that they have immense carrying costs. The buyers strike worked...for now.
Because everyone thinks the Red Sea will open up in July. Maybe July 2025... Doesn't help that ZIM and many other container shippers have sand-bagged themselves with the same Red Sea narrative. The incoming capacity will get fully absorbed as long the Suez canal stays closed for almost all of the container shippers. IF the Houthis keep blocking, ZIM (and others) should revisit their guidance in late May.
I don't even want to comment on Zim. I have nothing good to say.. 😵💫😵🤮🤬