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Owners of small box ships anticipate that charter rates will continue to rise

OWNERS of mid- to small-sized containerships are optimistic that they can continue to clinch daily charter hire rate increases for extensions or new contracts despite of the slowdown in global box traffic, protracted trade wars and scrubber retrofits

09 February 2020 - 19:00
OWNERS of mid- to small-sized containerships are optimistic that they can continue to clinch daily charter hire rate increases for extensions or new contracts despite of the slowdown in global box traffic, protracted trade wars and scrubber retrofits.

The confidence comes as the orderbooks in the smaller containership sectors are empty.



Speaking to Bloomberg radio, Global Ship Lease (GSL) chief executive Ian Webber said that although trade wars and tariffs were 'never good for business', they could create opportunities for smaller liner services, reported UK's The Loadstar.



'The very big ships, the ones deployed on trades between China and North America and China and Europe, are the ones that are going to be most affected directly by tariffs and trade wars, at least until something is resolved,' said Mr Webber.



'The mid-sized and smaller fleet is outside of that - that's 70 per cent of global container trade - and that is where my company is focused. There will be an indirect effect of course, but we expect the direct result to be negligible,' he said.



GSL owns 45 containerships ranging in size from 2,207 to 11,040 TEU, which it charters out to the major shipping lines on a fixed-rate period lease. It has US$750 million of contracted revenue.



Mr Webber sees a demand growth in the secondary trades of three to four per cent this year, driven by local economies and the shipment of goods that emerging nations.



He added that there were still opportunities to increase the fleet selectively with second-hand vessels of between five and 10 years old, preferably with a charter attached.



Moreover, he said, with asset values still at the bottom of the cycle there were investment opportunities 'for those that have the appetite and capital, which we do'.



Supporting Mr Webber's outlook for the sector, Alphaliner's recent charter review concluded that the market remained 'bullish in the face of a continued tight supply and a resilient underlying demand'.



It said: 'Although some charterers have recently focused on fixing scrubber-fitted vessels, non scrubber-fitted ships are also expected to remain in good demand in the medium term.'


WORLD SHIPPING
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