By Maggie Johnson
December 15, 2024
Image Credit: “Wallenius Wilhelmsen ship arrives at Port Kembla,” available at Yahoo Images (12/15/2024).
Wallenius Wilhelmsen, a world-renowned company in roll-on/roll-off shipping and automotive logistics, has achieved a significant milestone by securing two major multi-year contracts worth a substantial $375 million. These agreements with top automotive manufacturers not only underscore the industry's growing commitment to sustainability but also mark a significant leap in the company's journey towards a greener future, with both deals incorporating biofuel components.
The first contract, valued at $263 million over three years, will service the Asia-North America trade route and feature Wallenius Wilhelmsen's innovative BAF2.0 bunker adjustment factor. The second, a two-year agreement worth $112 million, includes a fixed surcharge specifically for biofuel usage. Both contracts are set to commence in 2025, starting in January and April, respectively.
“These agreements are a testament to our customers' dedication to sustainable freight solutions,” said Pia Synnerman, Chief Customer Officer at Wallenius Wilhelmsen. “Their willingness to invest in biofuel transportation aligns with our shared vision for achieving net-zero emissions.”
The deals come as the shipping sector navigates a cooling market. Following record-breaking post-pandemic earnings, the industry now faces new challenges. According to Clarkson Research Services Ltd, daily rates for vessels capable of carrying 6,500 vehicles have dropped below $100,000, a first since September 2022.
Further complicating the landscape are projections of fleet expansion outpacing demand. Clarkson estimates the global car-carrier fleet will grow by approximately 12% in 2024, while demand is expected to rise by just 1%. Additional pressures include potential EU tariffs on Chinese electric vehicles and ongoing shipping disruptions in the Red Sea.
Wallenius Wilhelmsen, despite the headwinds, remains a stable and resilient force in the industry. Operating a fleet of 125 vessels across 15 trade routes connecting six continents, the company also manages 66 processing centers and eight marine terminals, employing 9,500 people in 28 countries. This robust infrastructure positions the company well to weather the current market challenges.
The company's focus on sustainable practices aligns with broader industry trends, as customers increasingly prioritize eco-friendly logistics solutions. The inclusion of biofuel components in these contracts represents a pivotal move toward minimizing the environmental footprint of automotive shipping.
Wallenius Wilhelmsen plans to share its updated market outlook for 2024 and 2025 on December 16, providing further insight into its strategy amid evolving market conditions.
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