News / Soft market sees Zim forced off-course and offload surplus capacity

© Darryl Brooks

Zim, the fastest-growing ocean carrier in the past six months, is now heading in the opposite direction and has agreed a series of charter off-hires and sub-lets to reduce its exposure to the challenging market.

Indeed, a broker contact told The Loadstar recently he was seeing “a flood” of sub-lets hitting the containership charter market, as carriers endeavoured to cut costs in a continuing soft demand market.

Zim tops Alphaliner’s half-year capacity changes table with fleet growth of 13.3% since January, narrowly pipping MSC’s 12.2% capacity growth.

However, in terms of nominal teu added during the period, no line was anywhere near MSC’s phenomenal injection of 560,200 teu of capacity – ONE and CMA CGM being second and third, adding some 100,000 teu each.

Maersk continued to reduce its capacity during the six months, tracking down another 2.1% after last year’s 1.4% reduction in its fleet. According to Alphaliner: “Maersk continued to sell ships or end charters in the first half of 2023”, with some vessels placed on the S&P market ending up being purchased by MSC.”

These acquisitions, among others snapped-up by MSC in recent weeks, bring the number of second-hand ships acquired by the carrier since August 2020 to an eye-watering 318, according to Alphaliner data.

Meanwhile, Zim, which this month updated its full-year outlook from a profit to an ebit loss of up to $500m, appears to be having some success in off-loading its surplus tonnage.

“The carrier has reportedly agreed a mix of early charter terminations and sub-lets on several ships, while others naturally ended their charter contracts,” said Alphaliner. It said it was aware of five deals so far involving Zim-chartered vessels being sub-let, but that more could be on the way.

“Among the fixtures concluded so far, the 6,078 teu Zim Pusan, on charter until 2025 at $55,000 a day, has been sub-let to Maersk for two to five months at $36,500 a day,” said Alphaliner.

And Maersk announced last week that Zim Pusan would be deployed as an extra loader on the 2M’s transpacific TP1/Maple loop –leaving China on 31 July – to mitigate the impact of the blanked sailings resulting from the Canadian west coast dock strike.

The 23-year-old vessel’s remaining unexpired charter equates to about $30m in contracted revenue for its German owner, so the up-to-$5.5m in sub-let income from Maersk will add only a little to the liability.

Nevertheless, with some other sub-let ships, the Israeli carrier seems to at least be covering most of the charter hire, minimising its losses.

According to Alphaliner data, Zim has sub-let the 4,258 teu Volans, to Hapag-Lloyd for 12 months at just under $22,000 a day, compared with the daily $24,500 it is paying owner Costamare.