Boxships Gain Edge in Charter Negotiations Amid Tight Supply

Global Ship Lease stated that tight tonnage availability has given shipowners the upper hand in charter negotiations, as the company reported near net zero debt in the first quarter, according to the UK's Seatrade Maritime News.

Chief Executive Thomas Lister informed investors that charterers would prefer shorter deals amid uncertainty; however, limited liquidity means they must accept longer durations at firm rates. Chairman George Youroukos added that a ship available within six months could earn double the daily rate on a short charter compared to a multi-year commitment.

The company announced forward sales of three ageing ships: the 2,200 TEU Manet and Kumasi, and the 5,900 TEU Ian H. Each vessel will be over 25 years old when delivered between late 2026 and late 2027. The deal totals US$52 million, with a book gain of about $25 million, excluding cash flow before delivery.

GSL indicated that concerns over the orderbook to fleet ratio of 37 percent were less pressing in its segment. For ships of 10,000 TEU and above, the ratio is 60 percent, but for sub-10,000 TEU vessels, it is a more manageable 20 percent. Mr. Lister noted that the smaller fleet is ageing, with a projected 3.4 percent shrinkage by 2030 if older ships are retired.

The strong market is keeping ships in service rather than scrapped; however, executives stated that the ageing fleet provides downside protection, as scrapping would accelerate in a downturn. GSL has added to the orderbook with five mid-size reefer vessels worth $413 million, due in 2029 on charters averaging 8.1 years.

The latest contracts follow 10 newbuilds ordered in June for $917 million, delivering from late 2028 to early 2030. All 15 vessels will go straight onto multi-year charters. As of March 31, GSL had $2.1 billion in contracted revenues, with MSC holding 29 percent, Maersk and Hapag-Lloyd 19 percent each, CMA CGM 15 percent, and ZIM 12 percent.