BIV MAGAZINE
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BIV MAGAZINE: THE TRADE ISSUE 2021 PUBLISHED BY BUSINESS IN VANCOUVER
FLEET EXPANSION Seaspan sinks multimillions into new vessels as global container cargo market booms TIMOTHY RENSHAW
T
he world’s largest lessor of container cargo ships is increasing its bet on the buoyancy of global container cargo in the pandemic economy.
Casino chips on the table this time for Vancouver-based Seaspan Corp. come in the form of an agreement with a major shipyard announced March 30 to build six new container ships to add to its growing fleet. It’s not a bet for the faint of heart in the volatile global shipping sector. Capacity of each ship will be 15,500 20-foot-equivalent units (TEUs). The six will provide a portion of the 580,000 TEUs the Atlas Corp. subsidiary plans to add to its fleet to increase its container cargo capacity to 1.65 million TEUs. Seaspan did not release the overall six-ship price tag, but container ships in the 14,000- to 16,000-TEU range would normally cost between US$100 million and US$200 million. The company’s ship order is the latest step in its expansion ambitions. Under new corporate leadership that took over Seaspan’s helm approximately four years ago, the company has invested a lot of container-ship capital in an aggressive growth plan. Since 2017, when Gerry Wang retired as Seaspan CEO and David Sokol was appointed chairman of Seaspan’s board, it has added 71 new container ships and more than 890,000 TEUs. Annual revenue has increased 71% to US$1.42 billion from US$831 million. At the end of 2020, Seaspan’s global fleet consisted of 127 ships. The company also created Atlas in late 2019 and in early 2020 acquired APR Energy Ltd., the world’s largest lessor of mobile gas turbines, in an all-stock transaction valued at US$750 million. During Atlas’ March 9 conference call for its 2020 financial results, company president and CEO Bing Chen noted that Seaspan’s new vessel growth “has added $5.9 billion of gross contracted cash flow to Seaspan within the last few months.” Delivery of Seaspan’s six new ships is anticipated to begin in the second-half of 2023 and be completed by mid-2024.
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The deal, which will be financed through cash on hand and additional debt, is also further indication of Seaspan’s optimism amidst the current trade turbulence created by continuing waves of the COVID-19 pandemic. In an interview with BIV prior to his departure as Seaspan chief financial officer at the end of September 2020, Ryan Courson said the company “has a very positive view on the long-term supply and demand dynamics of the container shipping space.” He added that Seaspan’s container ship fleet, the world’s largest, “is going to be a key component of that supply and demand equilibrium.” That optimism is shared by some analysts in the global shipping sector. “As a person who has been accused of being Dr. Doom and Gloom for the past 10 years by every single industry participant, I’m weirdly optimistic on the volume side, especially the transpacific over the next year,” says Alan Murphy, the founder and CEO of Denmark’s Sea Intelligence. Murphy, whose company generates global supply chain research, analysis and data, told Business in Vancouver
AS A PERSON WHO HAS BEEN ACCUSED OF BEING DR. DOOM AND GLOOM FOR THE PAST 10 YEARS ... I’M WEIRDLY OPTIMISTIC ON THE VOLUME SIDE j Alan Murphy Founder and CEO Sea Intelligence
2021-06-29 1:43 PM
