Wallenius (WAWIF), Höegh (HOEGF): Car Carrier Shortage Lengthens Contracts

Wallenius Wilhelmsen (WAWIF) and Höegh Autoliners (HOEGF) both described the same car carrier capacity shortage on their FY2026 second-quarter earnings calls, held on 11 and 20 August 2026: their fleets are sold out, and Chinese vehicle exporters are now signing two- to five-year ocean freight contracts for space they used to book one year at a time.

Who pays for a long contract has changed sides

Finished vehicles move on pure car and truck carriers, known in the trade as PCTCs — ships the cars drive on and off, several thousand units at a time. For several years the industry expected a glut. Around 2024 the order book reached roughly 40% of the world's sailing fleet, and operators assumed 2026 and 2027 would bring more ships than cargo [1]. When rates are weak it is the shipowner who wants a long contract, because tenor stabilizes revenue, while the cargo owner is happy to renew annually at whatever the market offers.

Chinese export volume absorbed all of that new capacity. Wallenius says its Asian fleet is completely sold out and that almost no vessel can be chartered in [1]. Höegh puts 2026's incremental transport requirement at roughly 100 car carriers and estimates the current shortfall at about 70 plus 74 ships [2]. Adding tonnage quickly is not possible either: yard capacity is booked out to 2029, so a ship ordered today delivers in 2030 or later [1]. The cargo owner has lost the option to wait, and the side paying for duration has moved from the owner to the user of the ship.

Rates rose about 80% in a quarter, and China contracts stretched to five years

On the 11 August call Wallenius said the spot freight market and the time-charter market each rose about 80% during the quarter, and that with the most recent moves both had roughly doubled from the first-quarter low. On the same call it described lifting Chinese contract tenor from the one year that was typical last year to two, three and even five years, with second-quarter contracts signed at higher rates and longer durations than the 2025 equivalents [1]. Höegh supplied the other side of the gap on 20 August: between 1.0 and 1.5 million cars moved in containers in the first half of 2026, which management calls an involuntary substitution that will largely return to RoRo once capacity exists, while stating that it will hunt for capacity but will not commit itself to long-term high charter costs [2].

The same day, Navios Maritime Partners (NMM) reported the identical behavior in a different cargo. Seven VLCC newbuildings that do not yet exist have been fixed by charterers for an average of 6.1 years at an average net daily rate of $45,224, and total contracted revenue reached a record $4.4 billion with charters extending through 2037 [3]. The three companies share no cargo, customer or route, and land on one rule: when ships are scarce, the party that pre-commits to tenor is the one that needs to move the goods.

Contract backlog moves first, renewal rates later

The effect will not show up in reported profit right away. Car carrier operators earn most of their revenue under long-term contracts — Höegh disclosed on its February 2026 call that contracts covered 84% of volumes with an average remaining duration of 2.9 years [2] — so today's higher, longer deals arrive in cohorts as older contracts expire. The earlier reading is contracted backlog and its average duration, and only then the achieved rate on each renewal cohort through 2027 to 2029. On the paying side, Chinese vehicle exporters, oil buyers and liner companies take on an ocean freight cost fixed for several years.

The claim has a clear boundary. On its first-quarter call on 6 May 2026 Wallenius said this year's contracts were priced slightly below last year's average, and at that point volumes were moving out of containers back into RoRo [4], which dates the turn to the second quarter rather than to a condition that has held for two years. Two things are checkable from here: whether the next renewal cohort prints above the last one, and whether yard slots open up before 2029. If the cars now traveling in boxes do not come back, the estimated shortfall has to come down as well.

Companies exposed to the same change

• Beijing Changjiu Logistics (603569.SH): arranges finished-vehicle ocean shipping and international logistics for Chinese automakers, so it has to lock two to five years of ship space at current prices and sits on the paying side of this chain [6].
• Pacific Basin Shipping (2343.HK): a dry bulk owner that described the same yard constraint on its 6 August 2026 interim results call, dating slot availability to 2029-2030, and has taken 13 long-term chartered ships with purchase options instead of placing new orders [5].
• CSSC Offshore and Marine Engineering (600685.SH): one of the Chinese yards able to build car carriers; with berths full, new orders it takes can only deliver around 2030, and the years before that are already committed to existing contracts [1][6].

Sources

[1] Drillr · Wallenius Wilhelmsen (WAWIF) · 2026-08-11 · FY2026 Q2 earnings call

"And I would say in general what we did last year was typically one-year contracts in China. And just in one year, this is now moving to more normal as we do with others, two, three and even five-year type contracts."

[2] Drillr · Höegh Autoliners (HOEGF) · 2026-08-20 · FY2026 Q2 earnings call (contract share and average contract duration disclosed on the 2026-02-25 FY2025 Q4 call)

[3] Drillr · Navios Maritime Partners (NMM) · 2026-08-20 · Q2 2026 earnings call

[4] Drillr · Wallenius Wilhelmsen (WAWIF) · 2026-05-06 · FY2026 Q1 earnings call

[5] Drillr · Pacific Basin Shipping (2343.HK) · 2026-08-06 · 2026 interim results call

[6] Drillr · Beijing Changjiu Logistics (603569.SH), CSSC Offshore and Marine Engineering (600685.SH) · 2026-08-12 · company_search and financial_statements research record

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