LNG shipping is the part of the chain where prices move most violently, and the reason is structural rather than speculative.
What a rate actually is
A number of dollars per day, for a specified vessel on a specified route.
Specification matters because ships are not interchangeable. A modern two-stroke vessel with a low boil-off rate burns less of the charterer’s cargo than a steam ship, so it commands more per day and may still be cheaper to use. Assessments are therefore published against defined vessel types on defined routes, and the headline figure is only comparable within its own basis.
Rates are assessed rather than transacted on an exchange. Shipbrokers and price reporting agencies collect fixtures, talk to both sides of the market and publish a view for standard Atlantic and Pacific voyages. There is no clearing price; there is a consensus estimate of one.
Time charter equivalent
A voyage charter and a period charter are quoted differently, so comparing them needs a common measure.
Time charter equivalent takes the revenue of a voyage, deducts the voyage costs the owner bore — bunkers, port charges, canal dues — and divides by the days the voyage took, including the ballast leg. The result is what the ship earned per day, directly comparable with a period rate.
It is the number owners actually watch, and it makes the ballast leg visible in a way a headline voyage rate does not: a lucrative cargo that leaves the ship on the wrong side of the world can produce a poor TCE.
Why the swings are so violent
Three mechanisms, and they reinforce one another.
Supply is fixed in the short run. The fleet is small, and adding to it means a berth at one of very few yards, delivering years later. No amount of demand produces a ship this quarter. Scrapping is equally slow at the other end.
Demand is weather and politics. A cold northern winter, a nuclear outage, a continent replacing piped supply at short notice — LNG demand moves a long way in weeks, and none of those causes gives notice.
Voyage length changes effective supply. This is the mechanism people miss and the one that does most of the work. A ship’s earning capacity is round trips per year. Shift cargoes from a two-week route to a five-week route and the same fleet delivers far fewer of them, so effective capacity falls with no change in vessel count.
That last point makes the market unusually sensitive to events with no obvious connection to shipping. Canal congestion, a change in which basin buys from which seller, a re-routing around a chokepoint: each removes capacity as surely as losing ships would.
The marginal fleet sets the ceiling
Rates cannot rise indefinitely, because inefficient tonnage comes back.
Steam ships burn far more fuel than modern vessels and sit idle in a slack market. When rates rise far enough, they trade anyway, because an inefficient ship earning something beats an idle ship earning nothing. That reserve is the market’s shock absorber, and its size is one reason a peak resolves rather than persisting.
At the other end, the floor is set by the cost of laying a ship up and the willingness of owners with debt to keep earning something.
Seasonality
Northern hemisphere winter pulls demand and lengthens average voyages, so the fourth quarter is usually the tightest part of the year and the shoulder seasons the slackest. The pattern is reliable enough to trade against and not reliable enough to depend on, since a mild winter removes it entirely.
What this site holds
No rates, no fixtures, no positions. Freight is a commercial market and the data is licensed.
What is here is the physical structure the rate market prices: which terminals export and import, where they are, and which chokepoints sit between them on the usual routes. That last is an editorial routing model rather than observed traffic, and it is labelled as such wherever it appears, because a routing assumption presented as data is exactly the sort of thing that ends up in someone’s freight model unexamined.