Given the levels of uncertainty, ratcheted up by the US International Court of Trade’s outlawing of Donald Trump’s tariff wars, charterers remain unclear what lies on the horizon.
There are definitely clouds on the horizon, but whether they are storm clouds or wispy cirrus with a silver lining remains to be seen, but that is no help to those wondering whether to ship freight to the US or wait to see if the dust settles.
According to Alphaliner charter rates have been softening with Greek owner Costamare reporting net profits of $100 million, a year-on-year decline of 2% on revenue of $440 million, which was also an annual decrease of 6%.
“Despite market volatility demand for containership vessels had up to now maintained momentum,” said Alphaliner.
Shipbroker Braemar confirmed the charter market fluctuations, claiming that the container market is “anything but boring,” under the current US administration.
According to Braemar time charter demand, particularly in the larger sizes, is increasing and owners are looking to raise rates on the back of this renewed interest, “testing the markets willingness to follow”.
Braemar added: “So far, liner operators have been hesitant to meet these terms, trying to hold the line. However, if demand continues at this pace and commitments to alliance partners and service reliability remain top priorities, they may ultimately have little choice.”
Another possible silver lining from a non-vessel operating owner (NOO)’s point of view could be the US Trade Representatives introduction of the Chinese built ship port fees in America, which would be paid by the operator of the vessel, but as Gregory Zikos, CFO at NOO Costamare, explained could have short-term benefits for owners.
“The fleet redeployment and network reorganisations that will be necessary may, in the short-term, boost vessel demand,” explained Zikos, who added, “We cannot predict if in general the USTR proposal will affect assets prices; asset prices are also affected by supply and demand.”
Costamare is the sole shareholder of the 68-containership fleet after the company successfully separated its bulk carrier operation, which operates 37 ships, into a standalone public owned company called Costamare Bulkers Holdings Ltd (CMDB), on 6 May.
The third quarter will be the first full quarter of pure containership results.
Another Greek NOO Danaos reported a 14% fall in net profits of $119.8 million, compared to $138.8 million last year. Profits fell even though revenues increased 1.2% to $236.2 million.
Alphaliner reported that Danaos had, “Enjoyed a $24 million jump in revenues from the addition of container newbuildings, but this was offset by a $9.4 million reduction from softer charter rates and a $6.2 million drop due to lower vessel utilisation.”
Profits were also hit by increased operating expenses as a result of new ships, and average daily operating costs rose 8% year-on-year.
