Ship-buyers look for discounts as newbuild orderbook is squeezed hard
The arrival of a bearish containership charter market could lead to delivery dates for newbuild ...
Zim-operated containerships will return to North Europe next month, after an absence of more than five years.
The Israeli carrier is launching a monthly North Europe to US east coast service, starting with the sailing from Antwerp on 1 November of the 4,250 teu Seaspan Dalian, according to Alphaliner.
The consultant said Zim was expected to upgrade service frequency as soon as it could find additional tonnage.
It is likely to be paying Seaspan in excess of $50,000 a day for the charter of the launch ship.
The new transatlantic loop will call at Antwerp, Rotterdam, Bremerhaven, New York, Norfolk and Charleston.
Zim already serves the transatlantic trade from the Mediterranean, and it has no doubt been attracted back to North Europe by strong demand, lack of capacity and the spike in freight rates.
According to the latest reading of the North Europe to US east coast component of the Freightos Baltic Index (FBX), freight rates on the route have leapt by 225% since March to $7,117 per 40ft.
Zim suspended its long-standing Asia to North Europe liner services in 2014 after suffering very heavy losses, which contributed to the company’s near demise. The carrier was saved from bankruptcy by a financial restructuring that year, which saw its lenders and the owners of its chartered ships take a 68% stake in the company in a $1.4bn debt-to-equity swap.
As a consequence, Zim pulled out of loss-making services and deployed some of its surplus ships to the Asia-US east coast tradelane, which had seen a surge in spot rates due to the congestion and labour uncertainty that had blighted ports on the US west coast.
At the time, then CEO Rafi Danieli said Zim would focus on “select markets where the company has a competitive advantage”.
Zim can trace its turnaround back to the signing, in September 2018, of a strategic co-operation agreement with the 2M alliance on the Asia-US east coast tradelane. The co-operation was expanded in March 2019, to cover the Asia-US west coast and Asia-Mediterranean routes, and again in August 2019, for Asia to the US Gulf.
Moreover, Zim has launched nine standalone services in the past year and has grown its fleet to 106 ships, for an aggregate capacity of 408,000 teu, ranking it 11th in the container line capacity league table. And, through long-term charter agreements with non-operating containership owner Seaspan, the carrier has an orderbook of 25 vessels, for a capacity of 255,000 teu, which would bring it to ninth-largest, on a par with Yang Ming.
The New York Stock Exchange-listed carrier recorded a net profit of $888m for Q2, for a half-year result of $1.48bn, and it has upgraded its full-year outlook to an ebit of $4bn-$4.4bn.
Nevertheless, of all its peers Zim has the biggest exposure to the soaring charter market. Before its recent acquisition of four 4,300 teu panamax vessels for a reported $240m, it owned just one of its 106-ship fleet.