- Car-carrier lines NYK, K-Line, and MOL ceased transits through the Red Sea.
- PCTCs are prone to capsizing in strong winds due to their low stability.
- China’s surge in car exports, doubling its global share.
Car-carrier lines NYK, K-Line, and MOL recently ceased transits through the Red Sea, opting to navigate the contested Bab Al-Mandeb Strait instead of circumventing the Cape of Good Hope, reports The Load Star.
Introduction of Emergency Risk Surcharge
In response to the change, MOL introduced a new emergency risk surcharge to mitigate potential challenges and risks associated with the altered route.
Vulnerabilities of Pure Car and Truck Carriers (PCTCs)
PCTCs are prone to capsizing in strong winds due to their low stability, high walls, and susceptibility to the free surface effect. Operators are faced with the dilemma of navigating treacherous headwinds around the Cape or risking attacks by Houthi militants in the Bab Al-Mandeb Strait.
Impact on Industry Capacity
Elongated Cape transits by Japanese lines contribute to the existing capacity crunch in the industry, impacting the availability of Pure Car and Truck Carriers. Shippers have faced challenges, resorting to unconventional methods such as shipping cars in containers.
Newbuild Orders and Delivery Delays
Car carrier companies have placed significant new-build orders, but the majority of these vessels are not expected to be delivered before 2025. This delay exacerbates the ongoing capacity issues.
Surge in Chinese Car Exports and BYD’s Strategy
China’s surge in car exports, doubling its global share to over 20%, has led to challenges in capacity. BYD, a Chinese carmaker, has opted to secure its capacity by chartering vessels like the 7,000 ceu BYD Explorer No 1, constructed by China’s CIMC Raffles shipyard.
China’s Dominance in Electric Vehicles and BYD’s Success
China, dominating lithium battery manufacturing, is re-tooling its economy for mass production of domestic-branded electric cars. BYD, weathering the PCTC capacity shortage, has experienced remarkable growth, exporting nearly 250,000 electric and hybrid vehicles with a YoY growth of 334.2%.
Maersk’s Financial Move and Höegh Autoliners’ Share Price Surge
Maersk’s decision to sell its shares in Höegh Autoliners at the end of November resulted in a loss of $33 million, missing out on the subsequent surge in Höegh’s share price, which reached $9.95 this month from $8.34.
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Source: Loadstar
