PIL starts to rebuild fleet as records continue to tumble in red-hot container sector

In a further sign of the roaring, record-breaking period container shipping is enjoying Singapore’s Pacific International Lines (PIL) has expanded its fleet size for the first time since it ran into severe financial difficulties two years ago.

The SS Teo-led shipping line had a fleet size of approximately 400,000 slots at the start of 2020, but in the ensuing 18 months it sold off a huge swathe of its business to stay afloat, with its boxship fleet dropping in size by 37.5% to around 250,000 teu.

However, in recent weeks PIL, now with new backers, has started to rebuild. Latest data from Alphaliner shows the carrier, ranked number 12 in the world, now has a fleet just shy of 270,000 slots. Sources tell Splash that PIL has been busy taking back some ships that were chartered out earlier including the 11,923 teu Kota Pahlawan.

PIL’s restructuring was completed at the end of March with a unit of Singapore’s sovereign wealth fund coming in with $600m to save the SS Teo-led carrier.

Heliconia Capital Management, part of Temasek Holdings, bailed out Singapore’s largest liner company with funding coming in the form of loans, a revolving credit facility and an investment by way of convertible preference shares.

Since that bailout, container shipping has been on a record-breaking run. The Shanghai Containerized Freight Index (SCFI) – the benchmark liner spot reference – crossed the 4,000 point for the first time earlier this month, quadruple its historical average with liners now firmly on course to record their most profitable year in history.

Drewry is now forecasting the container shipping industry will post a record $80bn profit in 2021, up from earlier forecasts of $35bn. If freight rates surpass expectations in the remainder of the year, Drewry said an annual profit line in the region of $100bn is not out of the question, more than three times the all-time liner record.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
Back to top button