The Drewry Multipurpose Time Charter Index, over its latest quote has settled at USD 8,686 registering a month-on-month (MoM) dip of 2.54%. The index has give up about 23% from its highest ever level recorded at USD 11,170 in April-2022 and has recorded a 15-month falling streak, ever since. It must also be noted that the index had now given up over half the gains that it had made in the post-pandemic period as it rallied from USD 6,500 to the high of USD 11,170. We had seen earlier that the Market sentiment echoed in the sector turned a tad negative with the Market sentiment index reflecting the same.
While there have been talks on increasing newbuilds in the sector, there have also been a parallel mulling of scrapping some of the older fleet, as the MPV industry still has a fair share of vessels between 15 and 20 years of age. Would the latter signal capacity constraints leading to reversal of the fall, will still have a long way to develop for the market and stakeholders to see. For now, the rates are still on the drag with the other sectors of ocean freight posing competition. The index assesses vessels rates across different vessel size ranging from 5k- 20k deadweight, with appropriate weightages affixed. With the index now losing close to 16% on an year-on-year (YoY) bases, Drewry has estimated the next quote to be around USD 8,521, denoting an expected dip of 1.9%.
Author of the article: Gautham Krishnan
Gautham Krishnan is a logistics professional with Fluor Corporation, in the area of project logistics and analytics, and has worked in the areas of Project Management, Business Development and Government Consulting.