- Maersk sells 20 million Hoegh Autoliners shares, banking $169 million after reducing stake since 2021.
- With the door open for competitors, Grimaldi eyes expansion in the booming Vehicle Carrier sector, targeting a record-breaking $5 billion turnover in 2023.
- The industry’s surge, driven by China/Asia demand, sets the stage for potential bids in the lucrative market.
Strategic Acquisitions
Grimaldi, active in acquisitions, bought Naviera Armas in 2021, Finnlines in 2016, and made a strategic ACL takeover in 2000.
They dominate Intra-European, West African, US East Coast, and East Coast South American RORO trades, aligning with Hoegh’s services. Hoegh’s green ship initiatives boost their value, likely increasing in 2024 due to a supply-demand gap.
Supply Dynamics
Global supply tightens due to Panama Canal congestion and Red Sea disruptions, leading to diverted ships, longer routes, and reduced net capacity. Expectations of surcharges akin to the ‘Panama Adjustment Factor’ loom for RORO carriers, echoing trends in container shipping.
Anticipated 6.9% net supply growth in 2024 due to new Large Car Truck Carrier deliveries, but delayed launches sustain high freight rates. China’s booming fourth-quarter seaborne vehicle exports, up 52% YoY, fuel sector growth, propelled by global EV demand and their robust car market.
We are forecasting demand growth of 7% from the Far East in 2024, as China’s light vehicle exports start to plateau aligning more closely to global light vehicle sales forecasting, inferring a balanced market by 2025 as rates return to long term historical averages.
Rate Forecasts
2024 rate predictions anticipate a possible surge to $150,000/day on the 6,500 CEU Index, currently at $123,000/day, if supply constraints persist. Base case suggests peak rates around $130,000/day due to tightened supply versus 6-7% demand growth.
In the secondhand market, the Hoegh Bangkok sale to Beijing Changjiu Logistics for $63 million stands as the quarter’s notable transaction, slightly below the asset’s market value of $64.26 million as of December 2023.
Final Words
Anticipate European shipowner consolidation due to China’s RORO influence. Maersk’s Hoegh exit opens doors for Grimaldi’s entry; Wallenius Wilhelmsen seems a cultural fit, but Grimaldi’s growth drive and alignment in services and sustainability signal potential M&A shifts in deepsea RORO.
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Source: VV Blog
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