Harbour-Link gets a boost from sharp container freight rates increase
KUALA LUMPUR: The sharp increase in container freight rates globally is benefiting Harbour-Link Group Bhd, being a key player in the container shipping between Peninsular-East Malaysia, Affin Hwang Capital said.
Besides that, Affin Hwang said the decline in the number of new builds and higher scrapping during 2012-2019 had added to the supply shortages.
In tandem, the short-term charter rates for container ships are also seeing multi-fold jump due to the tight supply.
Elsewhere, Affin Hwang said the long-term charter rates had also risen but not as drastically as the short-term charter rates.
“As their confidence of the sustainability of elevated freight rates grows, ocean carriers are now committing to longer charter periods at higher charter rates.
“A number of non-operating owners (NOOs) have announced new charters to the ocean carriers at higher rates and for longer periods,” it said in a note today.
Domestically, Affin Hwang said the container shipping services between Peninsular and East Malaysia was an almost oligopolistic market.
The main players are MTT Shipping, Harbour-Link, Shin Yang Shipping and Malaysia Shipping Corporation.
“In spite of the rising global freight rates, the domestic freight rates have been flattish in 2021 due to the operators’ conservative pricing strategy and strong objections from the local businesses, authorities and politicians against increases in freight rates.
“To seek higher returns, some domestic and foreign operators have redeployed domestic capacity to the international markets,” it said.