Home > Featured > Logistics players follow large shippers by chartering own ships to secure space

Logistics players follow large shippers by chartering own ships to secure space

Logistics players follow large shippers by chartering own ships to secure space

Aerial top view of container cargo ship in the export and import business and logistics international goods in urban city. Shipping to the harbor by crane in Victoria Harbour, Hong Kong City at night.

According to Alphaliner, two new carriers have chartered small containerships to carry their own cargo and tap the lucrative spot market. Industry pundits are wondering if this could give rise to another Matson Shipping Line – that expanded from being a short-sea shipping line to a trans-pacific eastbound carrier as a result of space constraints and market dynamics some years ago.

Italian logistics company Rif Line has chartered two 1,100-1,200 TEU ships for 12-months to ply between Asia and the port of Civitavecchia, near its headquarters in Rome. The 1,118-TEU Iberian Express is chartered for 11-13 months for US$35,000 a day.

The 2008-built feedermax had loaded in Taicang and Shanghai and, according to vesselsvalue.com. The forwarder is offering a second sailing from China this week, by the 1,200-TEU Cape Flores, fixed for a 12-month charter at $39,000 a day.

Alphaliner said Rif Line intends to offer two sailings a month from Asia to the Italian port.

These newcomers are paying a very high price for these small ships, but current spot rates between Shanghai and Genoa stand at nearly $14,600 per FEU. This means a westbound trip could generate $7.3 million of revenue if 500 FEU of spot cargo is carried. Given the time-charter period of only a year or slightly longer, there is significant upside with minimal risks to these two newcomers even though charter hire for the round trip would eat around half of this revenue and, after port and bunker costs, Suez Canal tolls and agency fees. Shippers would be investing in greater supply chain certainty, which in today’s environ would be  regarded as priceless by many shippers.

The second newcomer is EShipping Gateways, a joint-venture between OOCL Logistics and JD Logistics (part of e-commerce retailer JD.com), which has already offered several sailings from Asia to North Europe. This news follows just a few short weeks from the announcement that Walmart and Home Depot were chartering their own vessels. The last 18 months have been extremely disruptive to supply chains and these are just some indicators of a dynamically evolving freight landscape.

 

Written by:

Peter Raven

Editor-In-Chief, CargoNOW Magazine

You may also like
Evergreen Orders $1B in Feeder Ships as Orderbook Nears All-Time High
FMC picks 24 shippers to advise it on container issues
FMC onboard for Biden’s ocean carrier ‘crackdown’
Whilst seemingly oblivious to the chaos in supply chains, carriers continue “feasting” on rates boom
Malcare WordPress Security