Box Ships Scrapes to Black

Box Ships Inc., an international shipping company specializing in the transportation of containers, has marked a 24% decline in charter rates for the first six months 2014, despite the fact that the company on average operated the same number of vessels as in 2013.

Michael Bodouroglou, Chairman, President and Chief Executive Officer of Box Ships Inc., said: “During the second quarter, there were some slight signs of improvement in the container ship market.

We managed to extend the charter of the MSC Emma with MSC for a further period of nine months at a daily rate of USD 9,450, which even though it is significantly below the previous rate of USD 28,500 per day, it is still a marked improvement compared to our previous extensions for similar vessels at around USD 7,000 per day earlier in the year.

In addition, more recently, we extended the charters of the CMA CGM Marlin and CMA CGM Kingfish for a further period of one year, commencing on September 1, 2014, at a daily rate of USD 9,500 and the charter of Box Trader until May 2015 or latest August 2015 at a daily rate of USD 8,500.”

The reduced charters on the Box Queen, CMA CGM Marlin and CMA CGM Kingfish were the contributing factors to the 24% decline in our adjusted time charter revenues year over year, which directly impacted our bottom line.

We have two vessels that will come off charter during 2014 and we are monitoring the market for the best suitable opportunities.

In the third quarter of 2014, we reached an agreement with one of our lenders for the full repayment of our loan at a significant gain, the savings of which contribute directly to our net asset value, while giving us a debt-free vessel.”

Pursuant to the company’s  chartering strategy, the focus remains on container ships with carrying capacities ranging from 1,700 TEU to 7,000 TEU employed on short- to medium-term time charters of one to five years with staggered maturities.

The company says it will also consider employing their vessels on shorter-term charters, or operating on the spot market.

Based on the earliest redelivery dates, and following the extension of charters discussed above, the company has reportedly secured under such contracts 83% and 39% of its fleet capacity for the remainder of 2014 and 2015, respectively.