Stena Bulk drops costly charters.
Swedish ship operator Stena Bulk will redeliver 11 tankers coming off long-term charters this year and replace them with more modern ships at rates that cost 25%-40% less to hire.
The plans reflect the industry-wide dilemmas facing tanker owners seeking to renegotiate charters after a protracted market downturn saw three-year time charter rates slump nearly 40% from highs seen in 2008.
Stena, which has a fleet of 60 tankers, said it redelivered up to 15 last year to cut costs as spot rates plunged and will renew its operating fleet with younger ships on time charters of up to three years.
It has also ordered six new suezmaxes at $67.5m each from South Korea"s Samsung Heavy Industries for delivery in 2011-2012.
Stena Bulk president and chief executive Ulf Ryder said the company could save $5,000 per day on suezmax charters and nearly $10,000 per day on medium-range tankers.
?We are fast substituting [redelivered tankers] with newer and cheaper tonnage for our cargo portfolio. So by 2011, we will have renewed some 30 ships in the two years at cheaper rates. This has a good impact on our bottom line,? Mr Ryder said.
?We have taken a couple of suezmax and MRs on time charter this month as I thought it would be the right time for that. We have done enough this month and will look again in April.
?We have seen banks and owners coming to us, saying "Stena, can you take this vessel on two or five year time charter?", as there is pressure from the banks to charter ships to first class owners or charterers.
?Even bankers are contacting us saying "we have a client and we are thinking of financing him, but he has to put his ships on charter first". We get these requests quite a lot now,? Mr Ryder added.
Stena was paying on average $30,000 per day for suezmaxes and $20,000 per day for MRs taken on time charter before, and during, last year"s slump in tanker markets.
It is paying $24,000-$25,000 per day on time charter costs for suezmaxes and $11,500 per day for MRs for the vessels chartered in the latest fleet renewal programme, Mr Ryder said.
The oldest suezmax tankers in its fleet are the 1997-built Nordic Voyager and 1998-built Nordic Jupiter, which will be returned to their owner, Nordic American Tankers. Mr Ryder said Stena was only commercial manager for the tankers.
?We are renewing the fleet constantly. We need a critical mass of about 60 ships and we are going in and out of the market all the time for our cargo programmes. We have about 40 tankers on time charter at the moment,? he added.
London shipbroker Clarksons priced suezmax one-year time charter rates at $25,000 per day, down from $47,200 per day in 2008 and $30,570 per day last year.
Time charter rates for MRs have more than halved in two years from almost $22,000 per day in 2008 to an average of $10,800 per day this year, which is down from $13,700 per day in 2009.
While paying record low time charter prices, Stena could also capitalise from higher spot rates this year.
?It will be a rough 2010 that"s for sure. Rate wise, it will be a modestly bad year, but rates are 20% to 25% on average better than 2009,? Mr Ryder said.