Seatrade-Maritime: Boxship owners still have the upper hand in charter deals, says GSL

Published by Seatrade-Maritime

Tight tonnage availability means shipowners have the advantage in charter negotiations, Global Ship Lease said in its Q1 earnings call, as the company announced it almost reached net zero debt in the quarter.

GSL CEO Thomas Lister said: “In the context of heightened uncertainty, the charterers would probably prefer to go short rather than to go long. Given that there’s such limited liquidity and availability in the charter market, if they want the tonnage, they have to move much closer to the terms that are being offered by owners like us… duration of several years is still possible and at very firm rates.”

Chairman George Youroukos added that a ship available in the next six months might get double the daily rate for a six-month charter than it would for a three-year commitment.

In another sign of the market’s strength, GSL said it had agreed the forward sale of 2,200 teu ships Manet and Kumasi, and 5,900 teu Ian H, each of which will be over 25 years old when delivered to new owners between the fourth quarter 2026 and fourth quarter 2027. The forward sale price was an aggregate $52m with a book gain of around $25m, not including the cash flow the ships will continue to generate before delivery.

At a time of broad concern over the orderbook to fleet ratio of 37% in container shipping, GSL said the picture was less concerning in the segment it operates in. The orderbook to fleet ration of 60% for vessels of 10,000 teu and over drags up the average, and the sub-10,000 teu segment is at a “more digestible” 20%.

The smaller vessel segment is also ageing, said Lister, and if all ships of 25 years old and more were netted out against deliveries through 2030, the sub-10,000 teu fleet would shrink by 3.4%.

The GSL executives noted that the current strong market was keeping vessels earning rather than going for scrapping, but the ageing fleet gives some protection from risk in a market downturn as scrapping activity would accelerate to trim supply.

GSL recently added its own ships to the container orderbook. Late last month, it signed newbuilding contracts for five mid-size ultra-high reefer vessels for a total of $413m. The vessels are due to deliver in 2029 straight onto multi-year charters with an average teu-weighted term of 8.1 years.

The latest newbuilds brought the owners’ orderbook to 15 vessels, adding to 10 orders placed earlier in June for $917m with deliveries from the end of 2028 through early 2030. Each of those vessels will also be delivered onto charter, with teu-weighted average durations of 6.7 years.

The company said that its fleet was 100% covered for 2026 and 86% covered for 2027, with a teu-weighted average of 2.6 years contract cover as of the last day of March.

MSC had the single largest share of the $2.1bn of contracted revenues GSL had in place on March 31, at 29%. Gemini Cooperation partners Maersk and Hapag-Lloyd were tied for second at 19% each, followed by CMA CGM at 15%, and ZIM at 12%.