Wallenius Wilhelmsen to Reactivate Last of Laid-up Vehicle Carriers
In a further sign of the changing market conditions, Wallenius Wilhelmsen announced plans to reactivate the last of its vessels that are being held in cold storage. The reactivations will take place in the third quarter of 2021, but instead of expanding capacity, they will replace capacity that the company has sourced through short-term charters.
According to the management, customer demand, scarcity of capacity, and rising rates in the time charter market, are making reactivation of vessels in layup a more cost-competitive option.
"As previously stated, we expect the overall industry supply-demand balance to improve in the mid-term. Given the time required to reactivate vessels, we believe that the time is right to reactivate the remaining vessels that have been laid up due to the pandemic. Predicting the potential market impact of the ongoing pandemic remains a challenge, however we have the flexibility in our operations to adjust the fleet for any changing market conditions," said Torbjørn Wist, acting CEO of Wallenius Wilhelmsen.
A year ago, in March 2020, the company began efforts to reduce capacity and lower its costs. In addition to temporary staff lay-offs, they announced the early retirement of four vessels, all 24 years or older, that would be sold for recycling. They also redelivered seven chartered vessels to the tonnage providers.
By June 2020, a total of 10 vessels had been placed in cold layup with seven in Norway and three in Malaysia. Wallenius Wilhelmsen, which has a fleet of 130 vessels, said it was the first time in 12 years that they had laid-up vessels.
In January and February 2021, they decided to reactivate up to 12 of the 15 vessels placed in layup last year. Nine of these vessels have already re-entered service, while three are in the process of being reactivated and are due to start sailing again during the second quarter.
The company also said that the vessel that was placed in cold layup before COVID19 will be activated in November 2021.
Wallenius Wilhelmsen is also completing its vessel construction program. The fourth and final new build in its HERO (High Efficiency RoRo carrier) class is scheduled to be delivered later this year. Each vessel is nearly 24,000 dwt with a capacity of 7,656 vehicles.