Second-hand boxship prices defy Europe’s rate collapse

Container ship values are climbing even as freight rates in Europe slump to their weakest levels in over a year, underscoring the disconnect between ship markets and the spot cargo trade.

The average price for a basket of five-year-old container ships has risen 17% year over year, reaching $11,413/TEU in late August, according to data from the Baltic and International Maritime Council. The price was up 6% since January, despite Shanghai export spot rates plunging more than 50% over the same period.

"Despite significantly weaker freight rates, secondhand ship values have strengthened," said Niels Rasmussen, BIMCO's chief shipping analyst. "Time charter earnings are providing support, while an idle fleet ratio below 1% has kept tonnage scarce."

Feeder ships under 3,000 TEU have seen the sharpest appreciation, averaging 26% higher than a year ago. Newbuild prices, by contrast, are down 4% year-to-date, pushing second-hand values to 80% of newbuilding levels -- their highest relative point since late 2022.

The rise comes as freight markets across Europe continue to erode. North Asia-North Continent rates (Platts Container Rate 1) collapsed through August, dropping from $2,900/FEU at the start of the month to $1,900/FEU by Sept. 3, their lowest since May 2024, according to data from Platts, part of S&P Global Energy. Mediterranean lanes (Platts Container Rate 3) softened to $2,400/FEU, leaving participants wary of further downside amid slowing southern European volumes.

"Rates are chaotic -- extra loaders have undercut the market, and carriers are being forced to chase cargo with ever-lower FAK levels," a European carrier told Platts.

"Unless carriers drastically tighten supply, rates will keep falling," a forwarder added.

Carriers' reluctance to implement aggressive blank sailings has left weekly deployed capacity on Far East–Europe routes above 310,000 TEU. Congestion at Antwerp, Hamburg, and London Gateway has compounded instability.

Rasmussen warned that capacity growth could deepen the imbalance.

"Ships with a total capacity of 2.3 million TEU are due for delivery by 2026," Rasmussen said. "Under normal circumstances, we would expect both time charter rates and second-hand prices to eventually begin to fall. However, feeder segments may prove resilient, as scheduled deliveries will only add 2.7% to that fleet."

For now, Europe's spot market continues to languish below cost recovery levels, with shippers reporting little difficulty securing September slots. However, carriers are beginning to add blank sailings around China's Golden Week holidays in early October, an attempt to tilt the supply-demand balance back in their favour.

If sustained, these capacity withdrawals could slow the decline and lend some support to fundamentals on the spot market, though most participants remain cautious about any meaningful rate recovery before the fourth quarter.