According to Alphaliner, the non-operating owner (NOO) cellular fleet has seen just under 500 vessels (a total of 1.7 million TEUs) sold to shipping line operators as end-users in the last twenty months. report that the NOO fleet has never been shrunk so quickly in such a short time. This loss is reduced to 1.6 million TEUs, when taking into account the few ships that end-users sold to NOOs during this period.
This mass exodus of fleets finds its root cause in the cargo demand boom following the COVID pandemic. It stems from a huge overnight need for container tonnage that caused charter rates to skyrocket to levels never seen before in container shipping history.
For liner operators, it quickly became more financially profitable to buy, rather than charter, ships, especially in the early days when second-hand ships were cheap. For NOOs, tonnage sales also proved an increasingly attractive option as strong buyer demand pushed asset prices to record highs.
The NOO fleet hemorrhage began in August 2020, when several carriers, including MSC, will begin tapping into tonnage providers’ fleets. From August to December 2020, a total of 79 NOO vessels with a capacity of 341,700 TEUs were sold to end users. This figure rose to 673,200 teu for 183 vessels in the first half of 2021. The second half was equally busy, with an additional 162 NOO vessels for around 500,000 teu sold to carriers.
In the year 2021 alone, about 1.2 million TEUs of NOO fleet capacity joined end users. The bleeding continues in 2022, with another 62 vessels for some 200,000 teu sold between January and mid-March. However, the war in Ukraine and the geopolitical and economic uncertainties it creates have dampened end-user enthusiasm for NOO tonnage, but this could be temporary. According to information from Alphaliner, MSC has just concluded three more acquisitions and other buyers are still looking for tonnage.
NOO vessels sold to shipping lines in the period from August 2020 to March 2022 had capacities ranging from 700 to 9,000 teu. Of the lines, MSC was by far the largest buyer, with 169 636,900 TEU containerships purchased second-hand. This is a staggering number, matching the size of a trader like Yang Ming, currently the 9th largest trader in the world, according to data from Alphaliner.
In second place was CMA CGM, with 62 vessels purchased for 207,000 TEUs, followed by Maersk with 27 vessels for 141,600 TEUs and Wan Hai Lines with 23 vessels for 139,700 TEUs. Sea Consortium and Hapag-Lloyd were also relatively busy, adding 14 and 13 ships respectively to their fleets. Sinokor, T.S. Lines, RCL and GFS were also among the active buyers, Alphaliner says.
The number of newbuilds ordered by NOO in the 1,000 to 9,000 teu size segments between August 2020 and March 2022, following a shortage of orders earlier, falls short of lost capacities for end users.
According to Alphaliner, the NOOs ordered a total of 175 vessels for 710,321 TEUs in the last twenty months. Just over half of this, 376,000 TEUs, has already been locked into long-term employment and will therefore not hit the charter market any time soon. This leaves the balance, only around 334,000 TEUs of free charter tonnage, expected to be available for employment on delivery. Most of the free charter tonnage refers to smaller ships of 1,000 to 3,000 TEUs, although some units of 5,000 to 7,000 TEUs are still believed to be unaffected.
Alphaliner concludes that the low numbers of newbuilds, compared to the amount of ‘lost’ tonnage, suggest that the NOO fleet needs many more orders in sizes 1,000-9,000 teu and below to warrant renewal. However, a number of factors including skyrocketing prices for new builds, deliveries increasingly far into the future, and uncertainties regarding environmental regulations and fuel options have all contributed to keeping orders speculative. of NOO at low levels.
Finally, the war in Ukraine and its aftermath, as well as the perception that the cargo demand bonanza could end soon, are not prompting NOOs to embark on any substantial new building programs, Alphaliner concludes.