The India Rickmers is headed for the scrap heap of maritime history.

In a move emblematic of the pain ship owners are feeling from overcapacity and consequent rock-bottom vessel values and freight rates, Rickmers Maritime announced that it will be scrapping the seven year-old containership it originally bought for $60 million. The proceeds will be used to pay down debt to Commerzbank AG, Singapore Branch which was being secured by the Rickmers India.

The containership (previously known as the Hanjin Newport) has a capacity of 4,250 TEU and a current market value of $5.9 million, according to the website VesselsValue. The same source says the panamax ship’s value plumetted 62 percent this year, thanks to the widening of the Panama Canal.

Under a memorandum of agreement between Rickmers and Commerzbank, once the net proceeds of the India Rickmers has been applied toward the partial repayment of the Commerzbank debt and, subject to certain other conditions, Commerzbank, according to a Rickmers statement, “has agreed to waive the repayment of a material portion of the remaining debt…”

The India Rickmers is said to be the youngest containership ever to be scrapped.

As industry overcapacity has led to dropping vessel values and freight rates, younger and younger vessels are being considered for demolition in an attempt to rebalance supply and demand. Vessel values have dropped an average of 26 percent this year, which has led accelerated demolition activity.

Rickmers Maritime now has a fleet of 15 panamax containerships with an average age of eight years.