- The Red Sea crisis has unexpectedly benefited non-operating containership owners (NOOs), providing a significant upturn in their earnings.
- The re-routing of liner services around the Cape of Good Hope has led to increased demand for chartered tonnage, reversing the previous declining trend in time-charter rates and periods.
- This development is seen as mitigating the impact of oversupply in the containership market, as reported by industry leaders during recent earnings calls.
Positive Impact on Earnings
The Red Sea crisis has had a positive impact on non-operating containership owners’ earnings, particularly in terms of time-charter rates and periods. Re-routing liner services around the Cape of Good Hope has increased the demand for chartered tonnage, providing a boost to NOOs’ revenues.
Contracted Revenues and Charter Durations
According to Costamare CFO Gregory Zikos, these recent developments have helped in securing employment for a significant percentage of open days for 2024 and 2025. Costamare has reported contracted revenues for container vessels amounting to $2.5 billion, with a remaining time-charter duration of 3.6 years. Similarly, Danaos’s CEO, Dr. John Coustas, noted that they have secured additional charters for their vessels at healthy levels.
Impact on Charter Market and Demolition Market
The disruption in the Red Sea has not only influenced charter rates but has also temporarily affected the containership demolition market. Alphaliner reports “no weakness in sight” for the charter market, with rising rates, especially for larger vessels. The resurgent interest in ‘classic’ panamax sizes (4,000 to 5,300 teu ships) is notable, with rates rapidly increasing. The Red Sea crisis has delayed expectations of a spike in the demolition market, which was anticipated due to the delivery of numerous newbuild vessels.
Extended Positive Outlook
Industry experts suggest that even if the Red Sea crisis were to end soon, the charter market might take some time to return to normal. The increased demand and supply dynamics are expected to influence charter rates for at least the next six months, providing NOOs with an extended positive outlook.
Overall, the Red Sea crisis has unexpectedly become a catalyst for improved earnings and market dynamics for non-operating containership owners, offering a reprieve from the challenges of oversupply in the industry.
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Source The Loadstar
