MSC’S SECOND-HAND SHIP SHOPPING SPREE CONTINUES DESPITE DECLINING VESSEL VALUES

Reports this week that MSC has purchased the 2013-built 9,403 teu Joseph Schulte for a price of around $55m confirmed that the top-ranked carrier has not lost its appetite for acquiring second-hand container tonnage.

Joseph Schulte

Photo: VesselFinder

The post-panamax container vessel was trapped in the port of Odessa, Ukraine after Russia invaded its neighbour in February 2022 and was finally released on 16 August this year.

According to Alphaliner, MSC purchased the ship from the vessel’s insurers trumping rival CMA CGM in the bidding process.

The consultant noted that if confirmed, the acquisition would take MSC’s unprecedented buying spree of second-hand tonnage since August 2020 to an eye-watering 324 ships.

MSC’s aggressive raids on the S&P containership market enabled the carrier to overtake Maersk as the largest carrier in terms of capacity in early January 2022.

Since then, its continued purchase of second-hand ships, coupled with the arrival of newbuild vessels has seen the gap between the two widen significantly – according to Alphaliner data, MSC’s fleet currently has a total capacity of 5.3m teu, compared to Maersk’s 4.1m teu.

Furthermore, MSC still has a huge orderbook of 1.5m teu of new vessels to be delivered from the shipyards, versus Maersk’s modest 400,000 teu of newbuild vessel orders.

MSC will need the extra ships when the 2M alliance vessel sharing agreement with Maersk is terminated at the end of next year, but until that time, and because of the current weak demand position on Asia-Europe and transpacific trades, newbuild ULCV’s face a period of lay-up before being phased into service.

For instance, it is understood that the scheduled maiden voyage of the 24,346 teu MSC Micol from Shanghai on 12 October on the 2M’s AE55/Griffin loop to North Europe has been deferred until next year in view of the extensive blanking on the service.

Meanwhile, the Geneva-based carrier has seen the asset values of many of its second-hand purchases plummet alarmingly as the value of ships has fallen – linked as they are to the daily hire rates that a vessel can command on the charter market.

For example, MSC acquired the 2005-built 5,042 teu Felixstowe Bridge (now renamed the MSC Felixstowe) in June 2022 for an undisclosed price, but estimated by Vesselsvalue to be $65m.

The maritime valuers currently assess the value of the ship at just $17.9m with a scrap value of $11m.

As part of the same transaction MSC also acquired the 4,738 teu Sino Bridge (now renamed the MSC Shanelle V) paying an estimated $60m for the 2004-built ship, which according to Vesselsvalue is now worth $16m and $11.8m for scrap.

However, MSC will also have purchased a number of second-hand ships when asset prices were lower than at present, which will help to mitigate any paper losses incurred during their phenomenal fleet growth of the past three years.

It was claimed that MSC’s buying spree of second-hand tonnage was initially a protection against sky-rocketing charter rates, but by hoovering up any available tonnage this also gave the carrier the opportunity to ship lucrative cargoes that its peers were unable to cover due to the lack of open tonnage.

Writer: Mike Wackett


Related News

MPCC buys five modern eco-design container vessels
MPCC buys five modern eco-design container vessels

1022 Views

Norwegian vessel owner MPC Container Ships acquired five modern eco-design vessels for a total price of US$136.4 million. These vessels have existing charter contracts with top-tier counterparties, further strengthening the company's revenue-generating capabilities.

Vietnam wants to double inland container handling
Vietnam wants to double inland container handling

1522 Views

Vietnam’s government is considering investing up to US$800 million to add more inland container depots (ICDs) in the country by 2030.

WORLD’S LARGEST INLAND PORT BECOMES LATEST VICTIM OF CHINA’S ZERO-COVID STRATEGY
WORLD’S LARGEST INLAND PORT BECOMES LATEST VICTIM OF CHINA’S ZERO-COVID STRATEGY

1811 Views

French logistics firm Geodis reported that as of yesterday trucking services in Shanghai, Kunshan, Taicang and Nantong are suspended following the extended lockdown. Delays are expected within the Yangtze River Delta and in Wuxi, Suzhou and Jiaxing.


Comment
  • Your review
main.add_cart_success