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Wallenius Wilhelmsen has secured two major multi-year contracts with leading automotive manufacturers, both featuring biofuel components. The deals, valued at approximately $375 million combined, demonstrate a growing commitment to environmental sustainability in the shipping industry.
The first agreement, a three-year contract valued at $263 million, will service the Asia to North America trade lane and incorporates Wallenius Wilhelmsen’s innovative BAF2.0 bunker adjustment factor. The second contract, spanning two years and valued at $112 million, notably includes a fixed surcharge for biofuel usage. Both contracts are set to commence in 2025, with start dates in January and April respectively.
“These agreements add to our contracted book of business and are a great testament to our customers’ commitment to ensuring more sustainable freight by investing in the use of biofuel when transporting their cars with us. We are dependent on forward-leaning customers who join us on the path to net-zero,” said Pia Synnerman, Chief Customer Officer at Wallenius Wilhelmsen.
The contracts come amid shifts in the market. After experiencing record-high earnings during the post-pandemic period, the sector is showing signs of cooling.
Recent data from Clarkson Research Services Ltd indicates that rates for vessels capable of carrying 6,500 vehicles have dipped below $100,000 per day for the first time since September 2022.
Industry analysts project challenging conditions ahead. Clarkson expects the car-carrying fleet to expand by approximately 12% next year, while demand is forecast to grow by only 1%. Additional headwinds include potential EU tariffs on Chinese electric vehicles and ongoing disruptions to merchant shipping in the Red Sea.
Wallenius Wilhelmsen, as a global leader in roll-on/roll-off shipping and vehicle logistics, operates an extensive network of 125 vessels across 15 trade routes, connecting six continents. The company maintains 66 processing centers and eight marine terminals, employing 9,500 people across 28 countries.
The company plans to release an update on its 2024 and 2025 outlook on December 16, before markets open.
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