Dayrate: The Key Number in Shipping Dividends
When you invest in shipping stocks — tankers, LNG carriers, dry bulk vessels — the dayrate is the number that determines everything: revenue, profit, cashflow, and ultimately, your dividend.
The dayrate is simply the daily hire rate a ship earns under a charter contract. If a VLCC (Very Large Crude Carrier) earns $80,000/day, that is its dayrate. Multiply by 365 and subtract operating costs and you get the annual profit per vessel.
Typical Dayrate Ranges by Vessel Class
| Vessel Type | Typical Spot Range (2026) | Break-even | Example Company |
|---|---|---|---|
| VLCC (crude tanker) | $40,000–$120,000/day | ~$22,000/day | Frontline, Euronav |
| Suezmax (crude) | $25,000–$80,000/day | ~$18,000/day | Hafnia, TORM |
| LNG Carrier | $60,000–$120,000/day | ~$35,000/day | FLEX LNG, GasLog |
| VLGC (LPG tanker) | $35,000–$90,000/day | ~$22,000/day | BW LPG, Dorian LPG |
| Handysize Dry Bulk | $8,000–$25,000/day | ~$8,000/day | Golden Ocean |
Spot vs. Time Charter: What's the Difference?
Spot rate: Daily market rate for immediate vessel hire. Volatile — can swing 50%+ in weeks based on crude oil flows, sanctions, and seasonal demand.
Time charter rate: Fixed rate for a multi-month or multi-year contract. More predictable for dividend investors.
Companies like FLEX LNG operate on long-term time charters (10+ years), providing stable, bond-like dividend income. BW LPG and Frontline operate on shorter spot exposure, meaning higher variance in dividends.
How Dayrates Determine Dividends
Most shipping companies pay variable dividends based on earnings. The formula is simple:
(Dayrate − OPEX − G&A − CapEx/debt) × Fleet size × Days → Free Cashflow → Dividend
A 10% increase in spot dayrates can translate to a 20–40% jump in per-share dividends, due to operating leverage. This is why shipping is volatile but rewarding in the right cycle phase.
Marco Bozem
Investor & Analyst | Hard Assets, Dividends, Shipping | MB Capital Strategies
Marco has analyzed commodity and dividend stocks for years with a focus on shipping, mining and energy. Not financial advice.
See which shipping stocks currently trade at the highest dayrate-to-price ratio:
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