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Containership rates up 300% due to attacks in the Red Sea

According to Dr. Ioannis Koustas, the conflict in the Middle East extended to the seas with attacks on ships in the Red Sea region

Containership rates have increased by 300% as a result of attacks on ships in the Red Sea, Dr. Ioannis Koustas said, commenting on the market conditions, following the announcement of Danaos Corp’s financial results for 2023.

The NYSE-listed company showed 973.5 million US dollars revenue last year, keeping performance at about the same level as in 2022 (993.3 million). At the same time, its contracted revenues amounted to 2.3 billion US dollars.

Danaos, which is one of the world’s largest independent containership companies, has also opened up the bulk carrier market, acquiring nine capes so far.

According to Koustas, the conflict in the Middle East extended to the seas with attacks on ships in the Red Sea region. This has changed trade routes and the performance of liner companies, as most major lines decided to reroute their ships away from the Suez Canal, sailing longer distances around the Cape of Good Hope to reach Europe.

This in turn, he pointed out, increased the demand for tonne-miles, leading to a lack of capacity, which led to a significant increase in container prices of up to 300%, while prices are expected to remain high as long as the turmoil continues.

“In this context, we have secured some additional charters for our vessels at very healthy levels,” noted Koustas.

More specifically, Danaos recently ordered two more vessels with a capacity of 8,258 TEUs at the Yangzijiang shipyard. Following the latest agreement, it has a total of four vessels under construction at the shipyard, with scheduled deliveries for the second half of 2026 and the first quarter of 2027.

Danaos has 12 containerships under construction in total and all are methanol ready, while they are designed with the latest ecological features.

According to Danaos, the demand for berths in shipyards is very high as the industry moves rapidly towards reducing carbon dioxide emissions by operating eco ships.

“As we continue to implement our strategy, we remain focused on taking actions that will ultimately benefit our shareholders. Danaos is well positioned, with a very strong balance sheet and significant revenue visibility through 2025. This gives us the flexibility to return value to our shareholders through dividends and share buybacks, but also to pursue opportunities to ensure the company’s long-term resilience,” Koustas underlined.