TS Lines expands Africa services and orders more ships
Taiwanese regional carrier TS Lines has increased its capacity on its Far East-East Africa services ...
PEP: TRADING UPDATE OUTMAERSK: BOTTOM FISHING NO MOREDHL: IN THE DOCKHLAG: GREEN DEALXOM: GEOPOLITICAL RISK AND OIL REBOUND IMPACTZIM: END OF STRIKE HANGOVERCHRW: GAUGING UPSIDEBA: STRIKE RISKDSV: STAR OF THE WEEKDSV: FLAWLESS EXECUTIONKNIN: ANOTHER LOWWTC: TAKING PROFITMAERSK: HAMMERED
PEP: TRADING UPDATE OUTMAERSK: BOTTOM FISHING NO MOREDHL: IN THE DOCKHLAG: GREEN DEALXOM: GEOPOLITICAL RISK AND OIL REBOUND IMPACTZIM: END OF STRIKE HANGOVERCHRW: GAUGING UPSIDEBA: STRIKE RISKDSV: STAR OF THE WEEKDSV: FLAWLESS EXECUTIONKNIN: ANOTHER LOWWTC: TAKING PROFITMAERSK: HAMMERED
Thailand-based intra-Asia niche carrier and containership tonnage provider Regional Container Lines (RCL) remained in the black in the third quarter, but said the “market fragility” was impacting its liner earnings.
However, the container vessels RCL has out on long-term charters to other shipping lines continue to produce a good return, thus insulating it from the full effects of the freight market downturn.
RCL posted a THB585m ($16.6m) net profit for Q3, for a 9M profit of THB2,074 ($58.8m), but acknowledged its average rate had declined 7% during the quarter, to $353 per teu, and had now slumped 51%, compared with the previous year.
It said: “Amid the challenging circumstances of the container shipping industry, the company was able to manage its operational efficiency for the third quarter of 2023 through its rigorous cost control and the strategic alignment of business operations.”
According to Alphaliner data, RCL has a fleet of 35 container vessels, ranging in size from 388 teu to 11,888 teu, of which 30 are owned, for a capacity of 65,383 teu. It also awaits four 7,000 teu and two 12,000 teu vessels ordered at the height of the liner boom, slated for delivery in 2024 and 2025, that will, presumably, be offered on the charter market.
Several of RCL’s owned ships are already on charter to other carriers, including the 11,888 teu 2022-built Zim Thailand and 11,714 teu 2023-built Zim Bangkok, both of which the Israeli carrier deploys on its Asia to US east coast loops.
According to vesselsvalue data, Zim has both ships on charter for five years at a daily hire rate of $65,000, providing RCL with some $237m of revenue over the periods, which is in excess of the combined build price of the vessels.
Meanwhile, despite being a leading player in the intra-Asia market, both for feeder and domestic business, and boasting a fleet of over 135,000 teu of owned containers, RCL is focusing outside its traditional trades on new markets.
For example, the carrier recently announced participation as a vessel provider in a new Far East-Africa service (REA), with Emirates Shipping Line, Global Feeder Shipping, Interasia Lines, KMTC Lines and TS Lines. RCL claimed this was the first direct link between Qingdao in China and Dar Es Salaam, Tanzania.
Ahead of the launch, RCL told The Loadstar the new loop was part of its mid-sea expansion plans, and that it would “build on its current route network”, which includes Asia to the Indian subcontinent and Asia-Gulf services.
Some of RCL’s peers in the intra-Asia trades had their heads turned by the huge earning potential on the transpacific during the liner boom years between 2020 and 2022. But they were forced to suspend their new services when freight rates collapsed in the second half of last year, and return tonnage to traditional intra-Asia trades, which added to the downward pressure on freight rates.
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