Short Sea Market Analysis - September 2025

Each month, Sea3R founder and director Peter Molloy talks to Short Sea News, providing insights into the current state of affairs within the European gearless coaster fleet.

This month, in his first column, Peter discusses asset values in the present market conditions.

Asset values are one of the most interesting things to watch in the gearless coaster fleet right now. This year, we’ve seen a considerable cooling in values operating in the European area.

Far from coming as a surprise, this has begun later than originally anticipated. We thought it had started during 2024, but then, towards the end of the year, there was a sudden uptick in values.

Now, though, we can clearly see that values are dropping. The reasons for this are clear: a continual decline in freight rates over the past two years throughout the region.

What is striking is the delayed impact this has had on asset values. If we compare it to the situation in 2022, when rates were rising – on the back of covid recovery – the increase in values was immediate and significant.

Given the scale of these increases, a decline was inevitable and is a correction of values, rather than a market collapse.

The impact on older tonnage is most pronounced. Again, this is not surprising; when values rose a few years back, it was older vessels that saw the largest increases.

That’s not to say that the effects are not also seen in younger tonnage – but the impact on newer vessels is certainly softer.

While most size categories of vessel in the fleet currently have healthy order books, the arrival of newbuilds will be gradual, providing a degree of protection for newbuild values.

This is particularly the case for the largest category of vessel that we analyse – the popular 8500 dwt gearless coaster. The younger tonnage of this category is overwhelmingly constructed and operated in Russia. Presently, these vessels are prevented from trading openly on the market, resulting in a shortage of supply and a much softer impact on values.

Protected newbuild values may result in an increase of vessel demolitions for older tonnage. In fact, this year there were perhaps the first signs of this taking place. It remains to be seen if this will become a trend.

In any case, the average age of the fleets is quite high – and continues to increase – with vessels above 50 years continuing to operate in some cases – providing plenty of scope for scrapping to prevent oversupply in the coming years.

Another thing to watch is the integration of new technologies. Some of the fleet falls under the requirements of recent environmental regulations. Because of this, some of the vessels on order are being constructed with efficiency enhancing solutions. This could help to further increase the divergence in values between older and newer vessels.

For the time being, although we do expect values to continue to drop, there are also positive signs. For one thing, values remain above what they were pre-2019, even when we take inflation into account.

Also, utilisation remains relatively high, so there is clearly demand. Additionally, there is still liquidity in the market with transactions taking place in what is, admittedly, a buyer’s market.

Sea3R works with financial institutions, investors, ship owners, charterers, brokers and legal companies offering a range of services including vessel valuations, production of bespoke reports and advice, as well as niche market reports.

This includes annual reports providing in-depth analysis of 3600 dwt, 5000 dwt, 6500 dwt and 8500 dwt gearless coaster vessels operating in Baltic Northwest Europe, the Western Mediterranean, and the Eastern Mediterranean and the Black Sea.