17 June 2024 (Lloyd's List) - SINGAMAS Container Holdings has secured two leasing deals with Mediterranean Shipping Company for 25,000 teu over 14 years amid the overstretched container market.
The two deals are priced at approximately $34.9m and $47.3m respectively and will let MSC buy the containers at the end of the lease, the Hong Kong-based container maker said in a stock exchange filing.
MSC is the world’s largest carrier with a total capacity of nearly 5.9m teu. The deal comes as the market is suffering from a shortage of container equipment and vessel space.
Carriers have been forced to secure new boxes and vessel charters beyond September, having initially been reluctant to commit too far in advance in case demand weakens after the peak summer season, according to a report by Linerlytica.
Last month, Taiwanese container liner Evergreen bought 27,500 containers from two suppliers at an estimated cost of nearly $100m.
The container shortage differs by region, with box prices in China surging by 45% in May, while in the US and Europe remained relatively stable, according to a report from Container Xchange, a dry box equipment leasing platform.
The report attributed the soaring prices to a combination of factors, including a substantial capacity shortage caused by Red Sea diversions and port congestion, worsened by an unexpected demand surge.
The global port congestion indicator hit the 2m teu mark, accounting for 6.8% of the global fleet with Singapore becoming the new congestion hotspot, Linerlytica’s report showed.
“Shippers are pulling shipment dates forward, resulting in a temporary demand for shipping capacity,” Container Xchange said.
China’s auto export, faced with impending tariff hikes set to take effect in the coming months, has reportedly contributed to the surging demand by frontloading cargo using containers.
Forwarding sources said BYD, China’s largest electric car maker, has shipped dozens of thousands of containers to South America earlier this year. There is also a shortage of available vehicle carriers are also scarce, sources said.
BYD has been contacted for comment.
