MPC Container Ships (MPCC) boss Constantin Baack believes there will be even fewer vessels open for charter next year.

Numbers have already shrunk dramatically in 2022’s record markets, the German feeder ship specialist’s chief executive explained.

Baack told a conference call that each year between 2019 and 2021 an average of about 1,500 vessels were available for lines to charter.

This year, as charter periods were stretched as operators sought to secure tonnage, only between 400 and 450 ships came open.

And this number has been reduced already to between 200 and 250 at the end of the first quarter, Baack said.

He described this as a “limited” total.

Baack added that if this trend is prolonged into 2023, the company expects to see just 350 to 400 vessels becoming charter-free.

This would mean a market “even more constrained” than before.

“So this is a bit of a, let’s say, new picture in terms of the charter market dynamics and certainly the forward fixing has wiped out availability not just for the quarters ahead, but also well into 2023,” the CEO said.

The development is very important when looking at the sustainability of the charter market, the shipping company argues.

More capacity needed

“We believe that in particular with a possible easing of the lockdown in China that there will be significant demand for extra loaders and for more capacity; we will see how that will play out in the charter market,” Baack added.

MPCC already has signed up two vessels for new charters after their current deals expire in 2023.

The company still has six ships coming off deals this year, however.

MPCC believes new charters for these units could translate into roughly $264m of revenue and Ebitda of $212m.

“If you were to apply the same figures for the remaining open position in 2023 that would roughly be revenue potential of $150m and Ebitda potential of around $340m for our vessels,” Baack said.

Nothing is forever

“I’m not suggesting that the market will continue forever like this. However looking at the scarcity of assets that we foresee for the remainder of this year and next year, we believe that there is at least certain stability when looking at the charter market in general,” he added.

The CEO also told the call that the company is now entering a period of “selective growth”, rather than the rapid fleet building seen in recent years.

“Cyclical and capital-intense businesses like container shipping should in my view be based on clear and rational capital allocation principles and investment principles when it comes to decision-making and capital allocation,” he explained.

Baack believes MPCC has to “walk the talk” in that respect by executing its clear strategy of careful investment and an emphasis on returning capital to shareholders.

“That does not mean we do not pursue growth measures at this stage,” the boss said.

And he added: “We don’t necessarily need to grow as quickly as we have done over the last five years. But … I have no doubts that we will find attractive opportunities.”

“If you look back over the last three to five years, we have always been able to do so, but we will not be in a rush to grow the fleet at any price; we will stick to our principles,” Baack concluded.