News / CMA CGM wins daily rate reductions on vessel charter extensions as owners seek security in choppy waters

Global Ship Lease (GSL) has announced that it has extended its charters with CMA CGM of the 2,207 teu geared Marie Delmas and Kumasi at a revised rate of $13,000 per day, compared to the current rate of $18,465.

The 2001/2002-built sister ships are deployed on CMA CGM’s Africa Indian Oceania service and their new time charters at the reduced rate began on 1 August, and are valid until the previous earliest expiry dates of the original charter parties in September next year.

Thereafter GSL has agreed options with the French carrier, which has a 45% shareholding in the ship owner, through to December 2020 at a fixed rate of $9,800 per day.

Ian Webber, GSL chief executive, said: “We are pleased to have secured extended terms through the end of 2020 for two of our earliest expiring charters, increasing our contracted revenue by $19m at a time when much of the container shipping market continues to experience significant distress.”

Mr Webber added that the options positioned GSL to “benefit in a strengthening market” while ensuring a base charter rate for the ships “in excess of the current spot market rates”.

Indeed, a similar ship, the 2002-built geared 2,526 teu Wehr Trave was recently reported to have been fixed for four-six months at a daily rate of just $6,500 – half of the amount that CMA CGM is currently paying, even after the reduction from GSL.

Mr Webber reiterated that “long-term contracts with high quality counterparties are a central component of Global Ship Lease’s strategy”.

However, for GSL, and especially the larger containership lessors that are not part-owned by a shipping line, the expiry of charters is a ticking time bomb that could seriously impact their long-term viability – unless the market improves dramatically beforehand.

The NYSE-listed shipowner has a fleet of 18 containerships, of which 15 are chartered to CMA CGM with the three remaining vessels on charter to OOCL.

GSL entered a sale and leaseback deal with OOCL in 2015 for three 2005-built 8,063 teu sister ships, the OOCL Tianjin, OOCL Qingdao and OOCL Ningbo, involving a 36 month/3-month time charter at $34,500 per day, expiring in 2018.

Elsewhere, Maersk Line has secured the 8,814 teu Northern Jasper, for deployment on its AC3 Asia-Mexico-USWC service, for a period of six-12 months at just $9,500 per day.