Hoegh Autoliners chief executive Andreas Enger is unconcerned by competition in car trades from container lines.
The Norwegian vehicle vessel owner’s boss was asked on an earnings calls on Wednesday about the threat from boxship companies and what he made of MSC Mediterranean Shipping Company’s NOK 7.6bn ($700m) takeover offer for rival Gram Car Carriers (GCC).
He responded: “I think Gram is a tonnage provider that benefits from having a good backlog of time charters to operators, and it sounds like … they don’t plan to change the business model.”
And he hinted that the lack of traction gained by container lines in the car sector could explain MSC’s move.
“I think in all fairness we don’t see much competition from the container lines,” Enger told the call.
“Most of our dialogue related to containers is with OEMs [original equipment manufacturers] currently shipping in containers wanting to create plans to get back on ro-ros.
“We’ve taken some volumes back from containers in the markets. Running large trade flows in containers is not really an option for the large OEMs.”
He described container shipping as an option for new start-ups and smaller volumes.
“It’s clearly an option for those who are not able to secure sufficient capacity on ro-ro vessels. But most of our dialogue is really taking volume back,” he said.
“We have taken some volume back in China and outside China, and we are having those dialogues.”
Hoegh Autoliners views boxships as a “cargo reserve” for the car sector.
Different environment
Enger said newbuilding orders for vehicle carriers are now creating a “different operator environment”, however.
Chinese, South Korean and US players are entering the market, and container lines are among them, he said.
“This is a competitive market, it will remain a competitive market,” he added.
According to Clarksons, GCC is the 16th-largest car carrier owner in the world in capacity terms, with a fleet of 18 vessels on the water of a combined 222,883 cbm.
