There’s been a lot of speculation about when and how fast the container shipping market would return to pre-pandemic norms. Today there is more hard data indicating the pandemic-fueled bull has run its course.
The HARPEX index tracks pricing in the charter market for container ships on the basis of actual weekly fixtures. It’s published weekly German shipbroker HARPER PETERSEN and provides rate assessments in U.S. dollars for nine classes of ships, based on vessel sizes (again based on actual weekly fixture reports), as well as Harper Petersen’s own market assessment, i.e. the HARPEX (HARPER PETERSEN Charter Rates Index).
The latest HARPEX reading of 3,095 is down a massive 17% from the previous week, with declines recorded in all nine classes of ships. Pulling the chart back a bit, you can see charter rates have now fallen by about 33% from the HARPEX’s all-time high reading of 4,586.25, which was recorded as recently as April.
As you can see in the chart above, the average reading over the last 24 months is 2,941.81, so charter rates are still slightly above the 24-month average. While the chart shows a minimum reading of 678.40 around September 2020, the HARPEX actually hit a pandemic low of 412 points a few months earlier in June 2020. So comparing those low values with the latest reading, the market is still well above where it was early on in the pandemic.
The decline of containership charter market rates have no doubt lagged the collapse of container spot rates. According to Drewry’s weekly composite World Container Index, spot rates have now fallen 29 weeks in a row, with the latest reading of $4,942 per 40-foot container 52% below the peak of $10,377 reached in September 2021. So it seems the container ship charter market is now starting to catch up to declining spot rates, considering the HARPEX continued to show gains into the Spring, and overall weaker sentiment in the market.
With all signs pointing to a softening market in the months ahead, it seems the container shipping’s pandemic-fueled bull run has indeed run its course. The question now is how far will the market fall before finding a new post-pandemic bottom?