Hoegh Autoliners has inked a new contract worth at least $100m.
The Oslo-listed car carrier owner said on Thursday that the deal, with a “major international car producer” and one of the shipowner’s top customers, will last five years and see its vehicles shipped from the US and Mexico to the Middle East.
“Serving our strategic customers and allocating capacity to them in our systems both ex. Atlantic and ex. Asia is our top priority,” said chief executive Andreas Enger.
“We have a long history in the US to the Middle East trade and it gives us confidence that customers see us as their trusted long-term carrier for their products in this corridor.”
The company declined to give more details on the contract value but said it was done at market rates where car carriers continue to report strong, though moderated, earnings.
According to Clarksons, a 6,500-ceu car carrier on a six to 12-month time charter was projected to earn $105,000 per day, down from the heights of $115,000 per day in March but still considerably stronger than the 2020, 2021 and 2022 averages.
In May, Hoegh Autoliners said it earned net freight rates of $83 per cbm, with rates ticking down from March and April, but up from the $76.30 per cbm net rates earned in May 2023.
The car carrier market has seen rates skyrocket over the last 18 months, amid rising auto demand and China’s rise to become the world’s top automobile exporter.
Rates rose further on the back of the Red Sea crisis, with car carrier owners deciding to stay out of the region to avoid attacks by Houthi militants.
Hoegh Autoliners decided to reroute around the Cape of Good Hope in December 2023, in a move the company acknowledged would winnow volumes.
Last month, it said it transported 1.2m cbm of cargo. Through 2023, that figure stayed between 1.3m cbm and and 1.4m cbm.
