News / Hoegh Autoliners signs five-year '$100m' deal with major automotive shipper

Car-carrier Höegh Autoliners has signed a five-year agreement with a “major” automative manufacturer, with sailings to commence in January.

Though Höegh was reticent to divulge specifics, the value of the deal with the unnamed shipper is understood to exceed $100m.

A trading update released the same day indicated that Höegh’s average gross freight rate had been $102.70 per cubic metre through November, a 1.2% increase over the Q3 average – indicating a strong possibility that a gross rate above $100/cu metre has been locked-into the five-year deal.

The average prorated net freight rate, meanwhile, was $87.50/ cu metre last month, and $86.70 for the previous three months.

This represents a substantial bump on the Q4 23 rate of $83.40/cu metre, which Höegh Autoliners CEO Andreas Enger described, in 2023’s full-year results, as “the best financial results in the company’s history”, .

And Mr Enger called today’s deal “the most significant the company has signed in 2024”.

He added: “We have, historically, a long-term relationship with this customer and are delighted they have chosen Höegh Autoliners as one of their core suppliers for deepsea transport… for the next five years.

“The activity level in November was high, both for contracted cargo and spot cargo. We continue to optimise capacity in the various tradelanes and give priority to our strategic long-term customers.”

The car-carrying sector is clearly in a period of flux – the east-west automotive trades are facing mounting challenges, from the incoming Trump administration in the US and growing anti-China sentiment across Europe over subsidies to electric car makers, potentially yielding diminishing demand over the coming years.

However, at the same time, global vessel capacity has been considerably constrained.

It is also a good time to be a Höegh shareholder: since the sale of 20 million shares by Maersk late last year at Nok90 ($8.44) each, the share price has been elevated over Nok120 for almost all the last three months, reaching a peak of Nok142.8 in late September.