Disruption drives Danaos charter backlog to $3.2 billion

Reporting its second quarter results Danaos said that container lines had rushed to secure charters as disruption in the Red Sea soaked up existing deployed capacity.

"The last few months brought continued market disruption as conditions in the Red Sea remained challenged and the Ukraine war persisted. Panama Canal crossings, however, returned to normal levels, eliminating that source of disruption for now. Market conditions have led liner companies to reassess their capacity requirement and rushed to secure tonnage, including tonnage with forward deliveries,” the company said in its earnings statement.

In addition the company said environmental regulations had increased demand from container lines for modern tonnage on medium-term charters.

Over the past two months Danaos said it had added $900 million to its contracted revenue backlog -$203 million on two-year forward charters for nine existing container vessels in its fleet, and $679 million in new charters and contract extensions on newbuildings.

During the second quarter of 2024 three new containerships were delivered into the company’s fleet starting three charters, and it ordered six more boxship newbuildings at Chinese yards for delivery in 2027 and 2028.

Danaos now has multi-year charters for its 20 newbuildings, including the three delivered in Q2, with an average duration of 4.5 years. Contracted charters to date provide $3.2 billion in forward operating cash revenues.

Related:White hot charter market as carriers compete for tonnage

Charter coverage for its container ship fleet in 2024 is 99%, and 80% for 2025.

In Q2 2024 Danaos reported revenues of $246.3 million up from $241.5 million in the same period in 2023. Net profit was $141.2 million in Q2 2024 down from $147 million in Q2 2023.