Time charter rates in the multipurpose shipping sector have improved slightly over the last month, according to the latest data from shipbroker Toepfer Transport.
According to Toepfer, the average daily time charter rate for a 12,500 dwt/F-type heavy lift vessel was USD7,547 in August 2019. In July 2019, the rate stood at USD7,426.
This represents an increase of USD253 on the August 2018 figures, which averaged out at USD7,294.
In the lead up to January 1, 2020 – the deadline for compliance with the IMO’s sulphur cap – it is anticipated that freight rates for the multipurpose sector will rise significantly, particularly in the third quarter of 2019.
Carriers are faced with two options: installing exhaust gas cleaning systems (scrubbers), or making the switch from heavy fuel oil (HFO) to low sulphur fuel. The majority of multipurpose shipping lines have chosen to burn compliant fuel and the preparations for this have already started.
As part of the switch from HFO to low sulphur fuel, companies have to prepare the fuel tanks, piping systems and engines of its vessels ready for compliance. As a result, significant costs will incur before the official enforcement of the regulation.
According to industry executives, these increased freight rates will serve to only cover these costs.