Market Trends of Ship Leasing Industry
Bareboat Charter Segment is Expected to Witness Significant Growth During the Forecast Period
- The bareboat charter segment is expected to witness a significant growth rate during the forecast period. The alternative ship lease contract to the time charter is the bareboat charter. Under the bareboat charter lease type, the lessee is fully responsible for the operation of the vessel. Under the bareboat charter, the lessor does not carry the operational cost and vessel performance risk, resulting in a more predictable and stable cash flow.
- However, in the case of a customer default, the lessor must first secure repossession of the vessel. The bareboat charter has proven to be the lease contract of choice for the tanker industry as it is important for tanker operators to have control over the vessel because this is the service that they sell to their customers, which constitutes the oil companies and traders.
- Moreover, bareboat charter agreements can prove to be a great financial alternative, especially for people or companies who have problems related to capital. However, on the other hand, the liabilities associated with these arrangements can be quite risky. In other words, having a written bareboat charter in place can easily prevent any miscommunication and can lead to smooth operations. In the present scenario, countries such as Italy, as well as Norway, amongst others, have adopted the bareboat charter form of rentals. Thus, the various advantages offered by bareboat charters will lead to various shipping companies adopting such a form of lease, and this will lead to growth in the market during the forecast period.
Understand The Key Trends Shaping This Market
Download Sample
Asia-Pacific Region Is Expected to Witness Significant Growth During The Forecast Period
- The Asia-Pacific region is expected to witness significant growth during the forecast period. According to the reports published by the United Nations Conference on Trade and Development, the Asia Pacific region has remained the world's leading maritime cargo handling center in 2021, accounting for 42% of exports and 64% of imports. In 2021, around 40% of total containerized trade was on the main East-West routes, namely between Asia, Europe, and the United States.
- Moreover, in 2021, Asian container exporters were among the top five, accounting for almost half the traffic, and included China, Viet Nam, the Republic of Korea, and Japan. Trade in iron ore grew only marginally by 1%, and China accounted for about 73% of world iron ore imports.
- As of January 2022, the top three ship-owning countries, in terms of both dead-weight tonnage and commercial value, included two Asian countries, namely China and Japan. Moreover, China also recorded the second-highest increase in tonnage (13%) among the top 25 ship-owning countries. As of the present scenario, maritime ship supply continues to be dominated by three countries, namely, China, the Republic of Korea, and Japan, which in 2022 together had 94% of the market. In addition, in the past few years, countries such as China and Korea have witnessed an increase in terms of shipbuilding activities by 15.5% and 8.3%, respectively. Additionally, In Viet Nam, the Ministry of Industry and Trade proposed several measures which were aimed at easing issues related to the supply chain along the intra-Asian routes and thereby reducing the burden on traders. Measures proposed by the Ministry also included tax incentives to attract foreign investment in new ships and to encourage private-sector investment in key infrastructure upgrades, as well as measures to encourage fleet renewal and the development of a coastal fleet management program. Thus, with such developments, there will be an increase in new ship leases to carry out new ship operations, and this will lead to a growth in the market during the forecast period.
Get Analysis on Important Geographic Markets
Download Sample
