Yacht shipping rates to stay high in 2023: Peters & May CEO

On the occasion of Peters & May’s 50th anniversary, CEO Simon Judson took questions about the company in 2023 and what he sees in the yacht shipping market. He predicts that yacht shipping rates will remain relatively high in 2023 and for at least another year to come. 

Yacht buyers in Asia face shipping costs into the tens of thousands of US dollars for their prized new possessions if they are coming from preferred build nations such as Italy, France and the UK.

The shipping industry has had a turbulent few years, and Judson says his company has come out of it in better shape than ever, predicting a record-breaking 2023. 

Asia-Pacific Boating: Peters & May had one of its most successful years in 2022, with over US$1 billion in cargo shipped across all sectors. How does that compare to 2021 and previous years? Do you expect a similar level of business in 2023?

Simon Judson: 2022 was not without its challenges. There were continued post Covid economic consequences maintaining high freight rates, as well as wild bunker (fuel) price fluctuations because of the war in Ukraine, to name a couple.

Despite this we entered 2022 with a strong, loyal and passionate team and a more dynamic and focused approach to all sectors of the business. As a result, 2022 has seen our general freight forwarding department increase in staff numbers, exceeding revenue milestones not seen in over 10 years with contributions in excess of 25% of the company’s £60M revenue. Both 2020 and 2021 were survival years. The world changed and we were forced to change with it. There is no doubt we have come out stronger with better communication and healthier teamwork leading the way. I feel 2023 will also be a strong year for the same reasons. We are already forecasting Q1 to exceed budgets.

Read: Hong Kong yacht imports in 2021 highest in 10 years

APB: Peters and May developed and patented the flat rail system for loading break bulk (yachts), and that you are working on new boat transport cradles. Can you say a few words about what kinds of innovations Peters and May is working on, and what types of yacht transport situations/challenges you are trying to solve with these innovations?

We are now fabricating a lot of our own cradling in-house and in Fort Lauderdale, we have recently been awarded a 10-year unrestricted stevedoring license, which means that not only are we cradling our own yachts, but we are also handling them in-house as well

SJ: One of the strengths of Peters & May is its in-house technical abilities as well as its team of eight full-time loadmasters. A combination of these two fundamentals means Peters & May is always evolving its cradling and lifting equipment. The patented flat rail system that allows us to ship 44-50ft (13 to15m) yachts to less accessible parts of the world at less expense to our client is just one of these innovations but has also been around for over 10 years. We are now fabricating a lot of our own cradling in-house and in Fort Lauderdale, we have recently been awarded a 10-year unrestricted stevedoring license, which means that not only are we cradling our own yachts, but we are also handling them in-house as well.

APB: You have mentioned the challenges of shipping industry in general: congestion at ports, Covid lockdowns, Russia-Ukraine war, etc. Can you give some indications on what you see for breakbulk shipping pricing and availability in the coming year?

SJ: Pricing on the multipurpose vessel (MPV) type that is used to transport yachts is driven by both the demand for space and the supply of suitable vessels. Demand for space continues to be high across most sectors, including oil and gas, mining (driven by the demand for raw commodities to build electric cars), and from excess Roll on Roll off cargo and wind energy / renewables.

Supply of MPVs over the coming years is expected to remain constant or decrease a little. Shipyards in China are fully committed to building containers ships for the next two to three years, and as a lot of vessels reach 20 years old, the vast majority will either be scrapped or sold into the secondary market whilst the number of new MPV’s entering the market is lower than ever before.

The combination of these two factors will keep freight rates high in my opinion. They may continue to drop slightly over the next 3 months, however, as we approach the second half of 2023 and into 2024/2025, rates will creep up again

The combination of these two factors will keep freight rates high in my opinion. They may continue to drop slightly over the next 3 months, however, as we approach the second half of 2023 and into 2024/2025, rates will creep up again. The forecasted growth in wind energy / renewables requiring shipment mainly from the Far East to the USA and Europe will be the main driver behind this.

APB: Can you give some idea of what yacht shipping has been like as a percentage of revenue for APAC (ie, shipments from builders to Asia-Pacific), and what you are hoping for in this coming year?

SJ: Shipping to and from Asia represents just under 10% of our total revenue. I expect this demand to stay the same if not increase in 2023, as China continues to relax its Covid regulations and dealers and clients understand freight rates are unlikely to subside significantly any time soon. Of course, our role as a freight forwarder is to maintain the best and most cost-effective solutions for our clients and that is what we will continue to do.

APB: Can you say also a few words about what you’re seeing in yacht shipments within Asia?

SJ: We see consistent demand for new yachts being imported to Hong Kong, Singapore, China, Philippines, Thailand, Taiwan, Japan and South Korea (yes pretty much all of Asia). The demand is probably still slightly increasing year on year, but volumes were already high pre-Covid. In terms of the secondhand market, most of the demand we see is for yachts bought in Asia (mainly Hong Kong, Singapore and Thailand) for shipment back to Europe or within Asia. The import of secondhand yachts into Asia is becoming less frequent, but this could be directly linked to the increase in new yachts being imported.

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