Taking the reins of Global Ship Lease during a container shipping mini-rally is a mixed blessing for new chief executive Thomas Lister.
The New York-listed tonnage provider has been reaping the benefits of an unexpected rise in charter rates and asset values this year.
But that has fuelled competition in the secondhand markets from cash-rich liner giants.
Companies such as MSC Mediterranean Shipping Company and CMA CGM are snapping up secondhand vessels that might once have been bought by traditional charter market owners.
The giants’ enormous financial firepower has sidelined some tonnage providers.
And that is presenting Lister with a different set of problems from those faced by his predecessor, Ian Webber, who retired on 1 April after nearly 17 years in the job.
“For an owner to compete on spot, charter-free deals with liner companies is challenging,” he told TradeWinds.
“The economics are very different for them than to us. They’re calculating on a very different basis.”
‘There are opportunities’
That is one reason GSL focuses on midlife container ships with charters attached.
Such was the case with its last acquisition in May 2023, involving four 8,500-teu vessels aged 20 years and over that were bought and chartered back to AP Moller-Maersk.
“There are opportunities,” said Lister.
“And you’ve got to choose very carefully the space within which you compete, which is explaining why we move selectively but not necessarily frequently on acquisition opportunities.
“The fact that we haven’t been out buying ships at a frenetic rate I think is reflective of our discipline.
“We will only do deals when the numbers work, when the risk and return metrics work.
“And while we’re looking at prospective acquisitions all of the time, we will only move when it makes sense.”
Prior to the Maersk deals, GSL had not been active in the sale-and-purchase market for three years.
It had a busy 2021, acquiring four traditional panamax boxships from Peter Dohle Schiffahrts, a fleet of 12 ships from Borealis Maritime and six older 6,000-teu ships that were also bought and chartered back to Maersk.
Not sellers
In contrast, GSL sold only one vessel last year, the 1,118-teu GSL Amstel (built 2008).
“We’re not sellers,” said Lister. The feeder ship was sold only because it was not core to GSL’s fleet of 68 vessels ranging from 2,000 teu to 11,000 teu, which is “where we see the best economics and the best sort of mix of risk and reward”.
GSL does not deem it necessary to sell even when asset values are rising.
“When you see charter-free asset values firming, you see charter rates firming even faster,” he said.
“So, if a liner company is buying a ship, it’s generally because they believe it’s cheaper for them to buy the ship rather than to charter in that ship from owners.
“The flip side of that coin is that if you’re an owner and you don’t have to sell — and we don’t have to sell — it makes economic sense to hold on to the asset and continue to charter it.”
GSL has some ships coming open later this year. These will benefit from an environment in which charter rates have been lifted because of the disruption in the Red Sea.
Intelligent followers
However, the company is not looking at ordering newbuildings, mainly due to uncertainty over future fuel choices.
“So we think … this is going to be a situation where it’s really the liner companies [that are] taking the lead on what the real fuels of the future will be,” Lister said.
“We prefer to focus upon existing ships at the moment, midlife ships rather than newbuilds.
“Because the moment you focus on a newbuild, you’ve got to take a 30-year view on the propulsion technology and the fuel, and we’re just not in a position as tonnage providers to do that yet.”
Lister, who was formerly GSL’s chief commercial officer, will continue to work closely with executive chairman George Youroukos, founder of technical manager Technomar Shipping.
“This is a business model that has worked for us through thick and thin,” Lister said.
“And when the opportunity arises to buy ships, we do exactly that, but, you know, we’re not impatient to do so.”
