Asian carriers trim boxship stakes
A number of Asian carriers have significantly trimmed their owned containership fleet over the last 15 months as they sought to reduce exposure to the fragile liner shipping markets. The seven major Asian operators surveyed by Alphaliner have disposed of 282,000 teu during the period, representing 16% of their combined fleet. This includes 155,000 teu that these operators sent for scrapping and a further 127,000 teu that were sold in the second-hand market and in financial engineering deals.
The Asian carriers were not the only operators to be trimming their fleet. Among the other main carriers, CMA CGM, MSC and Maersk have also taken steps to dispose of parts of their fleets. However, for most of the Asian carriers, the disposals were not compensated by the delivery of newbuildings or through chartering-in, as was the case for CMA CGM and MSC - resulting in a loss of market share. Also as percentage of the total owned fleet, the Asian carriers" disposals are significantly higher.
In particular, the moves by the three Japanese carriers, ,NYK, MOL and K Line, to reduce their exposure to the liner trade, mark a longer-term shift in these carriers" corporate strategies to downgrade the container shipping business segments. Within the last few months, NYK and K Line (as well as Japanese owners related to K Line) have sold nine over-Panamax containerships built between 1997-2002 of between 5,500 and 6,150 teu. The sales were conducted privately, at prices that were largely regarded as very attractive to the buyers.
The ships obtained strong charter backing immediately upon their sale.
In addition, MOL has also been active in disposing a large part of its fleet including sending a quarter of its owned vessels for scrap over the last 15 months. The 15 MOL ships demolished, a total of 44,500 teu removed, were amongst some of the youngest ships sent for scrap last year, at an average age of 21 years. These moves have seen all three of the Japanese carriers drop in the carrier rankings, with no Japanese carrier currently represented in the top 10, a situation that is unprecedented since the Japanese carriers entered the container shipping markets in the 70s.
Another Asian carrier that has seen a drop in market share is Evergreen, which fell out of the top 4 rankings this month, the first time it is not in the top 4 carrier rank since the 1980s. Evergreen has shed 34,000 teu of its owned capacity during the last year, including nine of its G/GX class ships (excluding seven more that were sold on leaseback deals earlier) built between 1983-1988. Evergreen remains the sole major carrier with no newbuilding order on its books and has so far refrained from making moves to rebuild its fleet.
The carrier with the largest shift in its owned fleet is Hanjin Shipping which sold 13 container ships of between 4,000 to 5,300 teu in June last year. This was part of a 16 vessel deal (including 3 bulk carriers) concluded with Korea Asset Management Corp. (KAMCO) which paid around $383 million for 17 vessels, including one bulk carrier from Hyundai Merchant Marine (HMM), which were bareboat chartered back to the sellers for 5-10 yrs. Hanjin"s sale represented 39% of its owned containerships as the company struggles with a strained balance sheet with a gearing of over 220% at the end of 2009.