Record Shipping Costs Add to Automotive Supply Chain Problems

The automotive industry, already grappling with a global shortage of microchipsnow sees another supply chain concern: a lack of boats.

Revenues from freighters that transport cars and industrial machinery around the world have soared to about $80,000 a day, the highest since at least 2000, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. .

This represents another small headwind – the maritime trade in cars represents only a fraction of the overall activity – for the industry. The tastes of Ford Motor Co.. and General Motors already painted a bleak outlook in recent months, largely due to semiconductor shortages hampering production.

But a stagnant fleet of ships alongside a steady recovery in demand from the nadir of Covid-19 has now boosted record rates for ships carrying up to 6,500 cars around the world. On a 60-day trip, that would mean about $740 per car, or about fivefold since before the pandemic, according to Bloomberg calculations based on Clarkson data.

According to Georg Whist, CEO of Gram Car Carriers ASA, some companies are concerned about being able to secure vessels to transport vehicles.

“People are worried that they won’t be able to get the tonnage,” he said by phone. “It’s been underinvestment for many years, and when the demand is still there, the day comes when it bursts.”

Cars are usually transported on so-called ro-ro ships, most of which are specialist carriers. The United States, Europe and the United Kingdom are among the biggest import markets, according to Clarkson. Whist said an increasing share of exports came from China, further expanding the fleet.

Gram said this week that it had signed a five-year contract to lease one of its vessels at an average rate of $60,000 per day.

It’s a sign of “breathtaking rates,” Fearnleys Securities analysts, including Oystein Vaagen, wrote in a note. Other listed owners, including Hoegh Autoliners ASA and Wallenius Wilhelmsen ASA, have also climbed in recent days.

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