Israeli ocean liner ZIM said Aug. 18 it expects global demand for containerized goods to surpass available supply, prompting the company to extend its projections of favorable conditions into next year.

With a lean orderbook for 2021-22 deliveries, sustained infrastructure congestion, and strong restocking and demand trends in both the US and European markets, ZIM expects its second-half performance to be stronger than that of the first half.
“We expect these market conditions to continue for the remainder of 2021 and very profitably into 2022, supporting these historically high levels,” said ZIM CFO Xavier Destriau during the company’s second-quarter earnings call Aug. 18.

The liner handled 921,000 twenty-foot equivalent units in Q2, up 44% from the same period last year.

This was due to high ship utilization, favorable demand dynamics, and the acquiring of additional tonnage, ZIM said.

Additionally, ZIM launched nine new services during Q2, including some expedited premium strings.

“These new high-speed lines and the others that we added during the quarter, has been instrumental in driving our record results as well as our positive forward outlook,” said CEO Eli Glickman. “Since launching ZEX, our initial high-speed premium line between China and Los Angeles, we have opened additional high-speed lines including one between Asia and Australia and between Australia to New Zealand.”

The group’s fleet sized ballooned to 113 containerships at the end of Q2, up from just 68 before the coronavirus pandemic.

Average freight rates for the quarter were $2,341/TEU, more than a twofold increase from $1,071/FEU in Q2 2020.

Global freight rates have surged in the past 18 months as pressure on supply chains, coupled with extraordinary levels of sustained demand, lent support to rates.

The Platts Global Container Index, a weighted average of Platts key assessments, slid Aug.18 to $7,353/FEU, still up significantly from the $1,430 seen on the year-earlier date.

ZIM reported an EBITDA of $1.34 billion, compared with $145 million in Q2 2020.

New equipment, LNG ships
The company contracted $763 million in new containers in 2021, increasing its container fleet by 265,000 TEU and bringing its total to more than 900,000 TEU.

In July, the company signed a long-term charter deal with Seaspan, a non-operating shipowner, for 10 7,000-TEU LNG dual-fuel containerships set to be delivered starting in the fourth quarter of 2023.

This came on the heels of an additional charter of 10,000 TEU and 15,000 TEU ship charter agreements by ZIM earlier this year. When all the ships have been delivered, ZIM’s fleet will be about 50% green-fuel powered, the company said.

“In doing so, we established ZIM as a leader in terms of carbon intensity among global liners,” Glickman said. “This will help us address increasing regulation on carbon emissions … we also maintain flexibility to transition to newer technology as they become commercially viable.”
Source: Platts