News / MSC scoops up more feeder ships in its 'quest for global dominance'

ID 99062985 © Sheila Fitzgerald

MSC is flexing its ability to handle “the bigger balls” as it continues its box ship purchasing spree despite fears of a market downturn and overcapacity.  

Maritime consultancy Braemar revealed that last week’s second-hand container market was dominated by “the omnipresent” MSC, which reportedly splashed out $55m to acquire the 3,534 teu New New Star and 2,553 teu Xin Xin Tian 2.  

Both were built in 2007, the former in China and the latter in Japan, and both are gearless.  

“With box rates falling while vessel prices and charter rates remain elevated – illustrating the somewhat oxymoronic market of recent weeks – some may wonder what this buyer perceives that others do not,” commented Braemar.  

Indeed, the Geneva-based carrier giant has also been linked to the purchase of the Atlantica Pioneer, a 3,651 teu geared vessel built in Shanghai in 2012, for $31.25m, with a charter attached. 

Currently MSC, the world’s largest carrier, operates around 900 ships, of which 600 are owned and 300 are chartered. 

Xeneta chief analyst Peter Sand told The Loadstar: “Having 300 ships on charter requires MSC to be in the market all the time, for new charters or extensions – at the right price. 

“Currently, you may argue that charter hire rates are significantly detached from the underlying freight market; thus it makes much more sense to acquire,” he added. 

Hans-Henrik Nielsen, global development director at NVOCC CargoGulf, told The Loadstar that MSC’s two-vessel purchase last week was “a steal”. 

He said: “If that figure is correct, $31.25m for a geared panamax/mini-panamax, with at least another 13 years life-span in operation, is a good price.”

He explained: “That is 4,745 days, which will give you a bareboat charter rate of $6,585 a day, or $1.80 per teu a day, for a geared relatively modern vessel. Good business from MSC, if true.  

“That is the kind of teu per day cost you dream of, and will only achieve with much larger tonnage these days.” 

According to Braemar, MSC is also rumoured to have committed to “no fewer than three” other feeder vessels in the past 10 days on private terms. 

Mr Nielsen believes MSC is “on the war path” for “pretty much global dominance”, adding “buying all tonnage to ensure no one else can get hold of them…”.

He cited commercial feeder operators that could use panamax-sized vessels, like XPR, Unifeeder, Global Feeders and BG Freight.

Meanwhile, market analysts at Braemar commented that MSC’s purchase underscored how the container market was “far from a level playing field”. 

“Some liners continue to operate on a smaller scale, while others wield larger rackets and handle bigger balls,” it concluded.