The share of container ships owned by charter companies has shrunk to a 12-year low of 40%. This decline is despite the overall charter fleet growing. Reasons include a shift towards operator-owned fleets, new players like Chinese leasing companies, and a focus on long-term chartering deals. This trend reduces flexibility for operators who rely on short-term options to adjust their fleet size. Expect the decline to continue as charter owner orders drop.
The share of the container fleet owned by charter owners has steadily declined, reaching a 12-year low of 40%. This decrease comes despite the charter fleet itself growing at an average annual rate of 3.2% over the past decade. The decline is attributed to a faster growth rate in operator-owned fleets.
Reasons for the Decline
- Shifting Market Landscape: The peak ownership period for charter companies (2009-2012) coincided with the rise of German KG (Kommanditgesellschaft) investment structures that fueled fleet expansion. This dominance has since waned.
- Rise of Chinese Leasing Companies: New players, particularly Chinese leasing companies, are emerging in the top ranks of charter owners.
- Focus on Long-Term Charters: Larger vessels (over 12,000 TEU) entering the charter market tend to be secured with long-term contracts before delivery, limiting short-term availability.
Consequences of the Decline
- Reduced Flexibility for Operators: The decrease in short-term charter options limits operators’ ability to quickly adjust fleet capacity based on market fluctuations.
- Strong Pandemic Market Impact: The robust charter market during the COVID-19 pandemic led to a rise in long-term chartering, further reducing short-term options as existing contracts expire.
Future Outlook
The trend is expected to continue, with the charter fleet’s share likely to shrink further. Charter owner order books have significantly decreased, indicating a slower growth rate compared to operator fleets.
Overall, the container fleet ownership landscape is shifting. While the total charter fleet continues to grow, its market share is being overtaken by operator-owned fleets. This trend, coupled with a focus on long-term chartering and the impact of the pandemic, is reducing short-term chartering options and impacting operators’ fleet flexibility.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Bimco
