Boxship owner Seaspan Corp is intent on fixing its smaller vessels for longer periods rather than selling them.

The leading tonnage provider is arranging charters of up to five years on a fleet of about 30 classic panamax and sub-panamax boxships set to be redelivered to the owner in 2022.

Bing Chen, president and chief executive of holding company Atlas Corp, said those vessels are expected to have charter terms concluded in the second half of this year.

Another 22 vessels set for redelivery in 2023 could form part of a “new creative offering” to be discussed with charterers later in the year, Chen told a conference call on Tuesday.

He said Seaspan has been signing charters of three to five years for 4,250-teu vessels in its fleet at rates of about $27,000 per day.

That had not resulted in a huge spike in Seaspan’s revenues in the first quarter. But he said longer periods are preferred to the shorter charters of two to three years at rates of about $32,000 per day.

“Optically, you see a short-term spike in revenue [with the shorter fixtures] but, after one or two years, your vessel will be open to uncertainty,” he said.

Not selling yet

Seaspan has no plan to sell vessels due to the disparity between their market price and their potential earnings.

“We have not seen opportunities where the sale price is greater or equal to free cash flow that we can generate from operating the vessels,” Chen said.

He suggested that a 4,250-teu vessel could lock in close to $42m in contracted cash flow over five years in today’s market.

Chen said that drops to roughly $30m once operating expenses of $5,500 per day are included, but rises again with the incorporation of a scrap value of about $6m.

He said the bottom line is that a 4,250-teu vessel can net cash of up to $36m, compared with the $28m to $30m that buyers are today prepared to offer.

Creative offering

Seaspan is expected to contribute massively to the profit of New York-listed Atlas Corp in the coming years after a huge expansion of its containership fleet.

The tonnage provider said in its first-quarter results that fleet growth hit a record 27%, with subsidiary Seaspan adding 36 vessels, including 32 newbuildings, at a total cost of $4.6bn.

The lion’s share of the growth comprises vessels of about 15,000 teu that are deemed strategically important to Seaspan’s growth.

But the company retains a fleet of 45 smaller vessels from 2,500 teu to 5,100 teu, which should prove hugely profitable in the next two years.

Ten will come off charter in the second half of the year, while 22 vessels for redelivery in 2023 would be the focus of talks with liner operators later in the year.

Chen did not elaborate but said the “new creative offerings” that Seaspan is planning would differ from conventional charter deals.

Seaspan reported a net profit in the first quarter of $97.6m, against $51.9m in 2020.

TradeWinds reported last month that the Hong Kong-headquartered company is drawing up plans to spend another $1.46bn on a further 20 new vessels of around 7,000 teu.