According to foreign media reports, ZIM has made a $3 billion bet that demolition and emissions regulations combined with a more flexible charter market and economic growth will bring a better balance of supply and demand to the market by 2025.
ZIM executive vice president and chief financial officer Xavier Destriau said the company is replacing older, smaller leased tonnage with more efficient modern ships but is betting on significant changes in market fundamentals to drive rates higher.
Zim has a total of 138 ships, of which 8 are owned and 130 are chartered. However, its fleet is changing, with approximately 39 new ships due to be delivered by the end of the first quarter of 2025. About 25 new ships are diesel/LNG dual-fuel vessels, 15 7,800 teu ships and another 10 15,000 teu ships, six of which have already been delivered.
Destriau believes these new, larger ships will reduce costs per teu.
“It costs the same to operate a 15,000 teu LNG ship as it does to operate a 10,000 teu ship, so at the same cost our potential intake in this service is 50% higher. So as long as we can fill By filling up the ship, we get the benefit of lower costs," Destriau said
It's a gamble that will inevitably see operators return to their pre-pandemic status, with overcapacity leading to a battle for market share, but ZIM believes that by 2025, the fundamental changes necessary for them to thrive will have taken place. That's a $3.1 billion bet on the company's cash reserves.
ZIM believes that another factor that will help shipping companies is that by 2025, as the epidemic ends, charter periods will increase significantly and the charter market will be "more resilient"
