The containership owner and charterer Seaspan Corp. said it has entered into a $550 million contract with a “major Asian shipbuilder” for several containerships.
Seaspan did not provide details on the number of ships, their size, shipyard or the prospective charterer other than to say it “expects to sign a long-term charters with one of the liner majors shortly.”
In January, Seaspan ordered five 14,000-TEU ships from Hyundai Heavy Industries that will be chartered to Yang Ming and four 10,000-TEU containerships from Jiangsu New Yangzi Shipbuilding Co., Ltd. and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. that will be chartered to MOL.
Seaspan, which currently has a fleet of 71 containerships, revealed the order as it reported a profit of $127.2 million in the second quarter of 2013 compared to a loss of $6.8 million in the same 2012 period.
Revenue was $167.8 million in the second quarter similar to the $167.6 million in the same 2012 period.
Gerry Wang, the company’s chief executive officer and co-chairman, said market fundamentals in container shipping have not changed in the past quarter, and that he expects cargo demand growth and ship supply growth will remain fairly balanced over the next two years, with variability on different trade lanes.
He said operators are managing supply of ships through slow steaming, and idling of ships. He said the orderbook for new containerships is at a manageable level of less than 20 percent of effective loading capacity or about a 7 percent increase per year. He said supply is likely to be reduced by ship demolition, order consolidation or conversion.
Charter rates for containerships have been weak, he said, especially for smaller ships.
He explained many liner companies are still struggling to return to profitability and that in recent meetings with the chief executives of shipping companies told him that their primary focus is on reducing unit costs through the use of larger, more fuel efficient ships.
He noted the balance sheets of some liner companies are not as strong as they would like, which could benefit companies like Sespan which charter ships because that could "make ship outsourcing a larger part of fleet modernization programs." - Chris Dupin