Market Paradox: Secondhand Containership Prices Surge Despite Plummeting Freight Rates

According to BIMCO, the prices for used containerships are rising sharply, contradicting the downward trend in freight rates. This situation is explained by persistently high time charter rates and a record-low idle fleet.

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The container shipping market is witnessing a notable paradox: while ocean freight rates are continuously weakening, the value of secondhand container ships is rising significantly.

Niels Rasmussen, Chief Shipping Analyst at BIMCO, stated: “Despite significantly weaker freight rates, the average price for five-year-old container ships has increased 17% year-on-year and 6% since the beginning of 2025.”

Specifically, the average price per TEU for a basket of seven five-year-old container ships was $9,761/TEU at the end of August 2024. Since then, this figure has risen to $10,758/TEU at the start of 2025 and reached $11,413/TEU at the end of this past August. The feeder segment, with vessels smaller than 3,000 TEU, recorded the highest price increases, averaging 26% year-on-year.

This rise in asset prices is in stark contrast to developments in the freight market. Rasmussen pointed out: “Container spot freight rates for Shanghai exports have dropped 51% since late August 2024 and 42% since the beginning of 2025, according to Shanghai Shipping Exchange. Average freight rates for Chinese exports have similarly fallen 41% year-on-year and 25% since the start of this year.”

Average global freight rates have also fallen as market volumes have been unable to keep pace with the speed of fleet growth, which has averaged 8.7% year-on-year year-to-date.

So, what is propping up secondhand vessel prices? The answer lies in the time charter market. Similar to the prices of five-year-old ships, time charter rates for periods of 6-12 months have increased by 17% year-on-year and 9% since the start of the year.

This divergence between freight rates and asset values is explained by the fact that idle ship capacity has remained below 1% throughout 2025, according to data from Alphaliner. This means that nearly the entire fleet is in operation, keeping the charter market tight and pushing charter rates higher.

Meanwhile, newbuilding prices have fallen by 4% both year-on-year and since the start of the year. Consequently, the average price of a five-year-old vessel has risen to the equivalent of 80% of a newbuild price, the highest ratio since the end of 2022.

Looking ahead, vessels with a total capacity of 2.3 million TEU are scheduled to be delivered in 2025 and 2026. Excluding the scrapping of older ships, this supply will add another 7.2% to the container fleet's capacity.

“Though great trade uncertainty remains, container volumes appear unlikely to grow as fast as the fleet. Under normal circumstances, we would expect both time charter rates and second-hand prices to eventually begin to fall. However, rates and prices for feeder ships smaller than 3,000 TEU may prove fairly resilient as ships scheduled for delivery before the end of 2026 will only add 2.7% to that segment’s total capacity,” Rasmussen concluded.

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