The supply of container ships is tight! Chartering costs hit a 13-year high, and the shipowner is expected to increase its revenue by 6 times this year!
It is reported that the lease cost of container ships has reached the highest level in 13 years. Shipowners are locking in the lease fees with shipping companies for a period of 3 to 5 years, and some shipowners expect their earnings to rise sharply this year.
Alphaliner, a shipping consulting agency, said that due to the continuous growth of freight demand and long-term port congestion plagued container fleets around the world, the overall supply of container ships remained tight.
The consulting company’s chartering cost index has reached the highest level in 13 years, and said that as shipowners’ prospects are optimistic, they will maintain their advantage for a period of time.
▍Shipping companies increase rents and extend ship charters
A London shipbroker said that he did not remember such volatility in the market that favored shipowners. "Our shipowner refuses to even consider the extension of chartering for less than 24 months, of course the time is much longer."
The latest lease extension includes the 3,421teu "Nordic Macau" vessel. CMA CGM has extended its charter period by 22-25 months at a daily charge of US$21,500, compared to the previous agreement signed with Hamburg South America for US$7,250.
The broker stated that Zim is prepared to pay all costs to obtain ships to support its growth strategy. The Israeli shipping company recently defeated other liner companies and leased 6,800 teu wide-beam Kea for 36 months at a price of $38,500 per day. The Asian regional shipping company Wan Hai paid US$21,500 for the ship built in 2013.
After paying $29,000 a day to renew the contract for one year, Zim also extended its lease of 8,814 teu Northern Jasper for five years at an undisclosed price. One broker said that the new price is likely to “exceed the standard”, and another said that he had heard that the ship built in 2009 was asking for $45,000 a day.
At the same time, shipping companies with strong financial resources continue to look for ships in the buying and selling market. Alphaliner said: “The demand for second-hand container ships by MSC seems to be great.” According to reports, MSC has purchased three more lightweight container ships to supplement its rapidly growing fleet.
Alphaliner said: "The number of vessels purchased by MSC has increased to 31 since August last year. This is an unprecedented purchase boom."
▍Shipowners will make substantial profits
The Hamburg and Bremen Shipbrokers' Association stated that “a real paradigm shift has occurred in favor of shipowners”.
The sharp increase in charter fees has also led to a six-fold increase in revenue this year, according to the Norwegian shipowner MPC Container Ships (MPC), which is listed in Oslo.
MPC Container Ships expects its operating profit in 2021 will be between 90 million and 120 million US dollars. This will be 6 times its 2020 operating income of 16.1 million US dollars.
Its CEO Constantin Baack said in the report: "So far, the strong market momentum has pushed charter fees to a 10-year high while extending the achievable charter period."
"In this ideal market dynamic, the group has re-leased most of its fleet and will see more ships open in the next few months. Therefore, the group is accumulating a large number of chartering vessels and ensuring profitability. "The CEO said.