Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I got burned by Sea Containers some years ago. Same thesis, disastrous results. Never again.

I understand.

But prior to the last 8 - 10 months, the container shipping sector has been a wretched sector for all but a select few (Maersk, MSC,, etc.) for at least a decade. About 4 years ago, a Top 10 player, Hanjin Shipping, crumbled and that had a ripple effect, and impacted several lower tier players. Likewise, Hyundai Merchant Marine (HMM) ran into issues that impacted several of its lower tier vessel partners.
The major issue in the past has been vessel overcapacity. That translated to downward pressure on rates. That has changed in 2021. There is very little idle capacity.

--

In the OP, I mentioned the renewal rates if a company has vessels rolling off charter.
This is GSL's Q1 2021 presentation
https://www.globalshiplease.com/static-files/a7d0eedd-0dff-4...

Slide 6 (Fleet charter status)
Newyorker Charter rate $8K => $20.7K daily
Athina Charter rate $9K => $21.5K daily
Ian H Charter rate $14.5K => $32.5K daily
GSL Christen Charter rate $14.5K => $35K

I will admit, not all the charter renewals or new charters doubled, or greater. But the point was to illustrate that the rate doubling was not an isolated event. Consider, in all the cases, the involved vessels are fairly old (youngest being an 18-yo vessel). At a different point in time, some of those 20-yo vessels would be scrapyard candidates. This year, in this market environment, those vessels are netting their owners wonderful cashflows.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.