Cargo owners have been getting away with cheap transport for too long, MPC Container Ships (MPCC) chief executive Constantin Baack believes.
He told analysts on a conference call that the cost of shipping containers has been too low over the past 12 years — "way lower than it should have been".
Baack forecast elevated rates in record markets, with the current levels persisting for another couple of quarters.
And it will be pay-back time for vessel operators over the next 10 to 15 years as energy transition effects begin to be felt.
He said the higher costs of moving towards net-zero emissions "will have to be reflected somewhat in rates levels".
With charter rates so high, Baack was asked whether counterparty risk was a concern.
He said that is something MPCC carefully monitors.
But he added that the situation has changed dramatically since the years after the 2008 financial crash.
All operators are earning "a lot of money", with balance sheets way more robust and MPCC's clients having much more long-term visibility.
No rush to the US
He also revealed that MPCC has no plans to capitalise on container shipping's high profile at the moment by setting up a dual listing in New York.
"A US listing is something to consider, but we are very comfortable with the Oslo listing. We are very well positioned for the time being," he said.
Market chatter about a New York float began in 2018, when the company moved to a full listing in Oslo.
MPCC was at that time closely watching the progress of other shipowners as they pursued New York IPOs.
Baack told TradeWinds back then: "Ultimately, of course New York is the place to be."
He was also asked by analysts about the impacts of slow steaming on the boxship fleet.
He described this as a complex question that the company is analysing, saying every 1% reduction in speed probably translates into a 3% to 4% cut in vessel capacity.
"This is just on paper. The answer is very challenging, but there is an impact on the supply side," he added.
MPCC announced the sale of six ships for $135m on 20 October, as well as a new five-year loan worth $180m from Hamburg Commercial Bank to pay off maturing debt.
Baack said the company had agreed a "very steep repayment profile, front-loaded to match Ebitda backlog on a specific pool of vessels" being used as collateral for the financing.
MPCC will repay $20m per quarter in the first year of the facility, with $15m per quarter being handed back in the second year.
The idea is to de-risk the balance sheet and the company further.
In August, MPCC upgraded its earnings forecast for the third time in 2021.
The company has virtually doubled its earnings guidance, with expected Ebitda in the range of $210m to $215m.
That compares with earlier forecasts of $120m to $140m in April and $90m to $110m in February.
