RIVALS SCRAMBLE TO KEEP PACE WITH MSC
The unmatched scale and growth ambitions of Mediterranean Shipping Co (MSC) is forcing competitors to scramble for tonnage. Alpahliner is reporting that MSC has now surpassed 400 secondhand ship purchases since it embarked on a historical buying spree amid the covid pandemic in August 2020. Alphaliner tallies 402 ships, while rival Linerlytica has counted 420 ships. Along with its huge orderbook, MSC now commands a global liner marketshare in excess of 20%, becoming the first liner in the world to break multiple size records such as surpassing 5m teu, then swiftly afterward 6m teu. Alphaliner listed this week another eight secondhand ships bought by the Gianluigi Aponte-founded liner ranging in size from 1,740 to 8,814 teu. MSC’s aggressive moves in the secondhand market have been key in propping up charter rates, according to an analysis from Linerlytica. “MSC is largely responsible for the shrinkage in the charter fleet, having taken out over 17% of the charter fleet in the past four years leaving its rivals to scramble to secure the remaining open ships, with more fixtures being done off forward dates that stretch into 2025 and 2026,” Linerlytica noted in its most recent weekly report.
AFTER THE TRUMP BUMP, CAUTION ON US TRADE PROSPECTS
With the impending inauguration of Donald Trump, returning to the White House, there has been considerable attention focused on questions of what might happen to trade flow, particularly into the United States with threats of tariffs looming. Concerns about levies on imported goods have been heightened with the announcement that Trump will be nominating a major supporter- Howard Lutnick, the CEO of financial services stalwart Cantor Fitzgerald, for the Secretary of Commerce post. Lutnick has been a major supporter of tariffs- particularly those aimed at China. There is also the potential that the Secretary of Commerce post could be linked up with the Office of the United States Trade Representative, though this is not clear from the initial announcements. The monthly webcast from the Port of LA on a path to possibly achieve new records in container throughputs, bolstered at least partly by goods moving in while Biden is still in the White House- one visage of “The Trump Bump”. Hosted by its Executive Director Gene Seroka, the online briefing delved heavily into the possibilities of what might or might not happen on the trade front once Donald Trump comes into office two months from now.
SHIPPING TOASTS BEST YEAR FOR TONNE-MILE GROWTH SINCE 2010
The Red Sea shipping crisis – and to a smaller extent, the drought in Panama – have led to the strongest growth in tonne-miles registered this year since 2010, helping prop up rates to highly profitable levels for most shipping sectors. According to data from Clarksons Research, seaborne trade remains on track to record a 6.5% growth in tonne-miles this year, the fastest rate of expansion for 14 years. Annual tonne-mile growth has averaged 2.9% since the financial crisis. “With disruption and increasing trade complexity driving voyage distances, this has significantly boosted vessel demand,” Clarksons noted in its most recent weekly report. The volume of global seaborne trade is on track to reach 12.6bn tonnes this year, according to the London broker, which is also forecasting what it describes as a “mind boggling” 66.6trn tonne-miles. Data from Gersemi Asset Management (see chart below) shows containerships have seen the greatest rejig of trading patterns thanks to the ongoing Houthi campaign against merchant shipping in the Red Sea and the Gulf of Aden. Alphaliner reported this month that proportionally, the ongoing Red Sea crisis has had a bigger impact on boxship employment than covid, helping propel earnings to remarkable highs this year.
IDAN OFER CASHES OUT OF ZIM
Israeli billionaire Idan Ofer is cashing out of ZIM after 25 years. Ofer’s Kenon Holdings has announced it will sell 14.8m shares in the Israeli carrier for $360m, having sold another 5m shares in July this year. Ofer will be left with 5m shares, which are in a collar transaction due to expire in July 2026. ZIM’s share price has risen by 260% in the past year. Last week, ZIM, the world’s ninth-largest carrier, reported Q3 earnings significantly above expectations. Adjusted EBITDA came in at $1.53bn, the liner buoyed by the ongoing Red Sea shipping crisis which has seen container shipping as a whole enjoy its best Q3 in history bar the covid era earlier this decade.