Ship leasing is a contract between a lessor and a lessee for the hire of a ship for a specific period on payment of specified rentals. In the shipping industry, a lessor (legal owner/leasing company) gives a lessee (operator/shipping company) in consideration of regular lease/hire payments, full possession, and operational control of the ship for an agreed period. Moreover, there are many forms of ship leasing contracts, the most common types of leasing structures are the operating lease and the finance lease. Operating leases are generally used for short to the mid-term charter of the ship and at the end of such term, the ship is returned to the lessor. Whereas finance leases are more commonly used for long- term finance of ships. Furthermore, the lessee enjoys the benefits and is subjected to the risks, of ownership of the ship because, it will have possession and operational control of the ship for the period of the lease. Furthermore, finance leases will include a hell or high-water clause which implies that the lessee cannot under any circumstances terminate the lease or be excused from paying hire. If the lease is terminated early, the lessee must compensate the lessor.
COVID-19 Impact Analysis:
A lot of cargo and passenger ships were not allowed to dock at ports by local authorities due to the outbreak of the COVID-19 pandemic. A lot of merchant sailors were stranded on the ship itself. Shipowners were also required to pay additional costs since their ships were stranded on territorial water for an extended period. Furthermore, owing to the outbreak, the movement of ships were restricted thus there were a lot of seafarers who reached the end of their employment contract and needed them to be renewed. Moreover, to prevent the risk of spreading COVID-19 there has been a decline in the import and export of products and goods. Thus, it severely affected the ship leasing market, since there were a lot of ships whose lease had ended and required renewal but the lessee was not able to pay due to financial constraints. COVID-19 has severely affected the shipping industry, which is expected to recover soon since shipping plays a very important role in transportation globally.
Top Impacting Factors
- Rise in demand for cargo transportation through marines, surge in international trade, and increase in transportation of heavy cargo drive the growth of the market.
- Rules & regulations regarding ship leasing and shipping delays hinder the market growth.
- Rise in demand for safe & secure transportation, no hassle of ship owing & maintenance, and increase in number of ship leasing act as an opportunity for growth of the market.
Rise in Demand for Cargo Transportation Through Marines
The increase in demand for ship leasing is being driven by the increase in demand for transportation of cargo through waterways since, it is economical, efficient, heavy & bulky cargo, safety, and environment friendly. For instance, according to United Nations Conference on Trade and Development (UNCTAD), approximately 1.68 billion tons of cargo is transported every year across the globe in 177.6 million containers covering 998 billion tons-miles. Moreover, Bocomm Leasing has signed a contract of $650 million with oil & gas company Shell for a dozen dual-fuel long-range tankers. Global Ship Lease signed a 38-month ship leasing contract with cargo shipping company Danish liner Maersk for 2000-built, 5,936 TEU containership Tasman in 2019. Thus, a rise in demand for cargo transportation drive the growth of the market.
Key Benefits of the Report:
- This study presents the analytical depiction of the ship leasing market along with the current trends and future estimations to determine the imminent investment pockets.
- The report presents information related to key drivers, restraints, and opportunities along with challenges of the ship leasing market.
- The current market is quantitatively analyzed to highlight the growth scenario of the ship leasing market.
- The report provides detailed ship leasing market analysis based on competitive intensity and the competition that will take shape in coming years.
Questions Answered in the Ship Leasing Market Research Report:
- Who are the leading market players active in the ship leasing market?
- What would be the detailed impact of COVID-19 on the market?
- What are the current trends that would influence the market in the next few years?
- What are the driving factors, restraints, and opportunities in the ship leasing market?
- What are the future projections that would help in taking further strategic steps?
Ship Leasing Market Report Highlights
By Lease Type
Key Market Players
Hamburg Commercial Bank, First Ship Lease Hoiding, Galbraiths, CMB Financial Leasing, Bank of Communication Financial Leasing, Maersk, ICBC Leasing, CCB Financial Leasing, Minsheng Financial Leasing, Global Ship Lease