Songa Container has appointed James Buck as chief executive.
The 42-year-old container shipping expert will take over responsibility for a fleet of 15 mostly scrubber-fitted boxships from 1,000 teu up to 5,000 teu.
Buck is a well-known figure in Asian and European container shipping circles, in which he has worked for more than 20 years.
He is expected to split his time between the UK and Oslo, and expressed enthusiasm to be taking over the role at a time of resurgent boxship charter rates.
He comes to the position at the Arne Blystad-backed company after a short stint at New York-listed container owner Seaspan, helping to build a European chartering desk. Before that, he worked for three years at the UK chartering desk of Lomar Shipping.
He also has experience of working on the shipbroking side, with Braemar Seascope and Maersk Broker, and began his career with liner operator Maersk.
Buck expressed optimism about the charter prospects for the small and medium-size boxships that make up the Songa fleet.
He expects to drive the business forward “into the next stage of development as a leading, high-quality tonnage provider in the container feeder sector”.
Relatively healthy
Songa’s larger containerships already appear to be benefiting from the charter rate recovery.
The biggest vessel in its fleet, the 4,957-teu Songa Toscana (built 2013), was recently fixed for six months with TS Lines at around $17,750 per day.
That is the same relatively healthy level that the wide-beam vessel obtained with the same charterer in March.
But rates for Songa’s smaller ships continue to languish at low levels that reflect the small feedership market.
That includes the 1,970-teu Songa Bonn (built 2010), which is getting just $6,900 per day for a three to six-month fixture with Cosco Shipping Lines.
But Buck noted that rates for smaller ships were picking up, with 2,800-teu vessels taken for $12,000 per day in Asia and 2,500-teu ships taken for more than $10,000 per day. Even ships of 1,700 teu were earning in excess of $9,000 per day, he added.
Songa recently completed a financial restructuring needed to avoid potential covenant breaches caused by the Covid-19 crisis.
In June, a group of 10 shareholders that included Blystad and Klaveness Invest pumped in a further $5m by purchasing new shares.
They also agreed to put in an extra $4m after bondholders decided on an amendment to an issue.
Bond maturity dates were extended by 18 months to June 2023 and a waiver of a loan-to-value covenant has been put in place until the end of next year.
“The bond has been reorganised and given us a bit more of a runway, the shareholders have been supportive and the markets are with us again as well,” Buck said.
One of the challenges facing Songa will be finding charter levels that pay for the capital investment on its scrubber-fitted fleet. Nearly all of its ships have been fitted with exhaust gas cleaning systems.
But it has indefinitely postponed its last scrubber installation on the 2,015-teu Songa Iridium (built 2008) due to unfavourable market conditions and a need to preserve cash.
The company said in its recent results that it has no plans to increase the fleet from its current level.
