The container shipping sector is seeing a widening gap between freight rates and charter rates. Despite falling spot freight rates, containership charter prices remain about 200% higher than in 2019, according to Drewry. The firm expects this disconnect to persist into next year before a long-awaited correction takes hold.
Freight rates respond quickly to changing market dynamics, while charter rates lag because many vessels are locked into multi-year contracts. But this time, the imbalance has stretched further than usual, driven by four key factors.
1. Tight vessel supply
A shortage of available charter tonnage is the main reason for inflated rates. Major carriers such as MSC and CMA CGM have absorbed much of the second-hand fleet, reducing vessels available to non-operating owners (NOOs). Liner-owned fleets now represent 64% of total capacity, up from 54% in 2019, giving owners greater pricing power and keeping rates high.
2. Geopolitical disruptions
Conflict and security risks in the Red Sea have forced vessels to reroute around the Cape of Good Hope, extending voyage times and tightening effective vessel capacity. These disruptions have increased demand for short-term and time-chartered tonnage.
3. Strategic carrier behaviour
Carriers are locking in long-term charters to ensure service reliability and hedge against future disruptions. This forward-fixing activity is especially strong for modern, fuel-efficient ships, keeping charter rates elevated.
4. Regulatory pressures
Environmental rules from the IMO and the EU ETS are pushing demand for dual-fuel and eco-compliant ships. Limited supply of such vessels has created a “green premium,” further driving up charter prices.
Despite the boom, Drewry predicts a market correction is inevitable. It expects average global freight rates to fall by 16% in 2026, while most vessel segments may still see slight charter rate increases before easing later.
As newbuilds enter service, demand slows, and Suez Canal routes reopen, the imbalance will fade. “At some point, the impetus to hire ships will unwind,” Drewry noted. “The charter market can’t defy fundamentals forever.”
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