ZIM Integrated Shipping Servic...
NYSE:ZIM
$ 11.65
+ $0.42 (3.82%)
$ 11.65
+ $0.42 (3.82%)
Real-time: 03/12/2024 15:59

ZIM Integrated Shipping Services Stock

About ZIM Integrated Shipping Services

ZIM Integrated Shipping Services Ltd. operates as a global container liner shipping company. The company provides customers with innovative seaborne transportation and logistics services. ZIM Integrated Shipping Services share price history

As of December 31, 2022, the company operated a fleet of 150 vessels and chartered-in 94.2% of the company’s TEU capacity and 94.0% of the vessels in the company’s fleet.

During 2021 and 2022, the company entered into several strategic long-term charter agreements, including two strategic agreements with Seaspan for the long-term charter of ten 15,000 TEU and fifteen 7,000 TEU LNG (liquified natural gas dual-fuel) container vessels to serve ZIM’s Asia-U.S. East Coast Trade and other global-niche trades, with the first vessel delivered to the company in February 2023, and the other nine vessels expected to be delivered to the company during 2023-2024. The company has also entered into a new eight-year charter agreement with a shipping company that is an affiliate of the company’s largest shareholder, Kenon Holdings Ltd., according to which the company will charter three 7,000 TEU LNG dual fuel container vessels, expected to be delivered during the first and second quarters of 2024.

Furthermore, in February 2022, the company announced a new chartering agreement with Navios Maritime Partners L.P. for a total of 13 vessels (including five of which are secondhand), ranging from 3,500 to 5,300 TEUs. In March 2022, the company entered into a seven-year charter transaction for six 5,500 TEU wide beam newbuild vessels with MPC Container Ships ASA and MPC Capital AG scheduled to be delivered between May 2023 and February 2024. During the second half of 2021, the company has completed the purchase of eight secondhand vessels, ranging from 1,100 to 4,250 TEU, in several separate transactions with all vessels delivered to the company.

As of December 31, 2022, the company chartered-in most of its capacity; in addition, 80.9% of the company’s chartered-in vessels are under leases having a remaining charter duration of more than one year (or 83.1% in terms of TEU capacity). The company’s fleet, mainly in terms of the size of the company’s vessels, enables the company to optimize vessel deployment to match the needs of both mainlane and regional routes and to ensure high utilization of the company’s vessels and specific trade advantages. Almost all of the company’s operated vessels have capacities that range from less than 1,000 TEUs to almost 12,000 TEUs, with one 15,000 TEU LNG (dual fuel) vessel delivered to the company in February 2023 in accordance with the company’s long-term charter agreement with Seaspan, and the nine other vessels expected to be delivered during 2023-2024. Furthermore, the company operates a modern and specialized container fleet, which the company significantly increased during 2021 to a capacity of nearly one million TEUs.

The company operates across five geographic trade zones that provide the company with a global footprint. These trade zones include (for the year ended December 31, 2022, of carried TEUs): Transpacific (34%), Atlantic (15%), Cross Suez (13%), Intra-Asia (31%), and Latin America (7%). Several examples of niche trade lanes within the company’s geographic trade zones include: U.S. East Coast & Gulf to Mediterranean lane (Atlantic trade zone) where the company maintain sa 13.4% market share; East Mediterranean & Black Sea to Far East lane (Cross Suez trade zone), 8.5% market share; and Far East to U.S. East Coast (Pacific trade zone), 8.6% market share, in each case according to the Port Import/Export Reporting Service (PIERS) and Container Trade Statistics (‘CTS’). ZIM Integrated Shipping Services share price history

During 2022 and as of December 31, 2022, the company announced the following main newly launched services and service upgrades: the extension of ZMI service connecting the Indian sub-continent and the East Mediterranean to service the East Mediterranean- North Europe trade; a new Venezuela feeder line and the upgrade of two existing central American lines; a new speedy e-commerce service from China and South East Asia to the U.S. East Coast (‘ZXB’), which was further upgraded in February 2023; the commencement of two separate and independent new Asia Pacific North West and Asia Mediterranean services in April 2022; the upgrade of the Turkey- USEC (‘ZCT’) line to a weekly service; a new Thailand Fremantle Express (‘TFX’) Service, covering major ports in South East Asia and Australia, and; the ZIM Colibri Xpress (‘ZCX’), a new premium line from South America West Coast to the USEC.

In addition to containerized cargo, in an effort to respond to increased demand for car carrier services, and specifically to the increase in vehicle exports from China (and electric and hybrid cars in particular), the company also transports vehicles (such as cars, buses and trucks) via dedicated car carrier vessels westbound from Asia, and primarily from China, Japan, South Korea and India. The company charters 11 car carrier vessels and the company has expanded the volume and its range of services to include additional calls to ports in Europe, the Mediterranean and South America.

As of December 31, 2022, the company operated a global network of 67 weekly lines, calling at approximately 300 ports, delivering cargo to and from more than 90 countries. The company’s complex and sophisticated network of lines allows the company to be agile as the company identifies markets in which to compete. Within the company’s global network the company offers value-added and tailored services, including operating several logistics subsidiaries to provide complimentary services to the company’s customers. The company continues to develop the company’s network of additional logistics companies in order to provide comprehensive services to the company’s customers. These subsidiaries, which the company operates, among others, in China, Vietnam, Canada, Brazil, India, Singapore, Hong Kong and the U.S, are asset-light and provide services, such as land transportation, custom brokerage, LCL, project cargo and air freight services.

The company’s strategic collaboration with the 2M Alliance, consisted of the two largest global carriers (Maersk and MSC, which announced the termination of the 2M Alliance in January 2025), was launched in September 2018, amended in February 2022, and provides faster, wider and more efficient service in the Asia- U.S. East Coast and the Asia- U.S. Gulf Coast with two trade lanes, seven services and approximately 15,000 weekly TEUs. In addition to the company’s collaboration with the 2M Alliance, the company also maintains a number of partnerships with various global and regional liners in different trades. For example, in the Intra-Asia trade, the company partners with both global and regional liners in order to extend the company’s services in the region.

The company has a highly diverse and global customer base with approximately 34,000 customers (which considers each of the company’s customer entities separately, also when it is a subsidiary or branch of another customer) using the company’s services.

The company has focused on developing industry-leading and best in class technologies to support the company’s customers, including improvements in the company’s digital capabilities to enhance both commercial and operational excellence. The company use the company’s technology and innovation to power new services, improve the company’s best-in-class customer experience and enhance the company’s productivity and portfolio management. Several recent examples of the company’s digital services include: ZIMonitor, which is an advanced tracking device that provides 24/7 online alerts to support high value cargo, eZIM, the company’s easy-to-use online booking platform; eZQuote, a digital tool that allows customers the ability to receive instant quotes with a fixed price and guaranteed terms; Draft B/L, an online tool that allows export users to view, edit and approve their bill of lading online without speaking with a representative; and ZIMGuard, an artificial intelligence-based internal tool designed to detect possible misdeclarations of dangerous cargo in real-time.

Furthermore, the company has formed a number of partnerships and collaborations with third party start-ups for the development of multiple engines of growth which are adjacent to the company’s traditional container shipping business. These technological partnerships and initiatives include: ‘ZKCyberStar’, a collaboration with Konfidas, a leading Israeli cyber-security consulting company, to provide bespoke cyber-security solutions, guidance, methodology and training to the maritime industry; ‘ZIMARK’, a new initiative in cooperation with Sodyo (in which the company made an additional investment in 2022), an early stage scanning technology company, aimed to provide visual identification solutions for the entire logistics sector (inventory management, asset tracking, fleet management, shipping, access control, etc.) and this technology is extremely fast and is suitable for multiple types of media; the company’s investment in and partnership with WAVE, a leading electronic bill of lading based on blockchain technology, to replace and secure original documents of title; the company’s investment in Hoopo Systems Ltd., a provider of cutting edge tracking solutions for unpowered assets; Ship4wd, a digital freight forwarding platform offering an online, simple and reliable self-service end to end shipping solution, that is initially targeting the U.S. and Canadian small and medium-sized businesses importing from China, Vietnam and Israel; the company’s investment in Data Science Consulting Group (DSG), a leading technology company specializing in Artificial Intelligence based products, solutions and services, developer of e-volve, a holistic AI governance and decision management system, and the company’s co-creator of a center of excellence for the development of AI tools for the maritime shipping industry; and 40Seas, an innovative fintech company serving as a platform for cross-border trade financing.

The company’s digital investment in its information technology systems has allowed the company to develop a highly sophisticated allocation management tool that gives the company the ability to manage its vessel and cargo mix to prioritize higher yielding bookings. The capacity management tool, as well as the company’s agility in terms of vessel deployment enables the company to focus on the most profitable routes with its customers.

Services

With a global footprint of more than 200 offices and agencies in more than 90 countries, the company offers both door-to-door and port-to-port transportation services for all types of customers, including end-users, consolidators and freight forwarders.

Comprehensive Logistics Solutions

The company offers its customers comprehensive logistics solutions to fit their transportation needs from door-to-door. The company’s wide range of transportation services, handled by the company’s highly trained sea and shore crews and supported with personalized customer service and the company’s unified information technology platform, allows the company to offer its customers higher quality and tailored services and solutions at any time around the world.

The company’s customers place orders either online or with a customer service member in one of the company’s regional agencies located around the world. The company issues the bill of lading detailing the terms of the shipment and, in the case of a typical door-to-door order, the company delivers an empty container to the shipper’s designated address. Once the shipper has filled the container with cargo, it is transported to a container port, where it is loaded onto the company’s cargo vessel. The company has experience in shipping various types of cargo, such as over-sized cargo, dangerous and hazardous cargo, cars, trucks and vehicles and reefer shipments. The container is shipped either directly to the destination port or via one of the company’s scheduled ports of call, where it is transferred, or ‘transshipped,’ to another ship. When the container arrives at the final destination port, it is off-loaded from the ship and delivered to the recipient or a designated agent via land transportation. The company partners with regional and local land transportation operators to provide a range of inland transportation services via rail, truck and river barge, often combining multiple modes of transportation to ensure efficient and cost-effective operation with minimum transit time.

The company also offers ZIMonitor, its premium reefer cargo tracking service. ZIMonitor is an advanced real- time monitoring device that, among other things, allows the company’s customers to monitor their shipments in real time. The company has also partnered with Alibaba through the company’s logistics subsidiary in China to expand the company’s offerings to small- and medium-sized enterprises who conduct their business through Alibaba’s platform. The company’s commercial cooperation agreement with Alibaba was extended until March 2024.

Services and Geographic Trade Zones

As of December 31, 2022, the company operated a global network of 67 weekly lines, calling at approximately 300 ports delivering cargo to and from more than 90 countries. The company’s shipping lines are linked through hubs that strategically connect main lines and feeder lines, which provide regional transport services, creating a vast network with connections to and from smaller ports within the vicinity of main lines.

Pacific Geographic Trade Zone

The Pacific geographic trade zone serves the Transpacific trade, which covers trade between Asia, including China, Korea, Southeast Asia, the Indian subcontinent, and the Caribbean, Central America, the Gulf of Mexico and the east coast and west coast of the United States and Canada. The company’s services within this geographic trade zone also connect to Intra-Asia and Intra-America regional feeder lines, which provide onward connections to additional ports.

Pacific Northwest Service: The company holds a position within the PNW, via the Canadian gateway Vancouver, which enable the company to serve the very large Canadian and the U.S. Midwest markets quickly and efficiently. The company’s strategic relationships in these markets with Canadian National Railway Company (‘CN’), a rail operator, have allowed the company to obtain competitive rates and provide consistent, high-quality service to the company’s customers. In April 2022, the company launched an independent service line to the Pacific Northwest trade, replacing the previous cooperation with the 2M Alliance.

Pacific Southwest Coast Service - In response to the growing trend in eCommerce, the company launched during 2020 and 2021, three eCommerce Xpress high-speed services, focusing on e-Commerce between South China and Los Angeles (ZEX, ZX2 and ZX3 lines). As a result of current global market conditions due to COVID-19, the company has experienced heavy congestion in USWC ports throughout 2021. As of December 31, 2022, the company had suspended ZEX, ZX2 and ZX3.

Asia-U.S. All-Water Service: With respect to the Asia-U.S. east coast trade, ‘all-water’ refers to trade between Asia and the U.S. east coast and Gulf Coast using marine transportation only, via the Suez or Panama Canal. In accordance with the company’s agreement with the 2M as amended in February 2022 effective from April 2022, ZIM operates one out of the five joint Asia to USEC services (ZCP), as well as one of two joint Asia to USGC services (ZGX). The company plans to deploy ZIM’s 15,000 TEU LNG dual fuel vessels expected to be delivered to the company during 2023 on the ZCP.

As of December 31, 2022, the company offered 11 services in the Pacific geographic trade zone, which had an effective weekly capacity of 23,589 TEUs and covered all major international shipping ports in the Transpacific trade.

Cross-Suez Geographic Trade Zone

The Cross-Suez geographic trade zone serves the Asia-Europe trade, which covers trade between Asia and Europe (including the Indian sub-continent) through the Suez Canal, primarily focusing on the Asia- Black Sea/East Mediterranean Sea sub-trade, which is one of the company’s key strategic zones.

The company’s cooperation with the 2M Alliance which began in March 2019 as a slot charter agreement on two services from Asia to the East Mediterranean was terminated effective as of April 2022. Consequently, the company launched an independent service line on the Asia-Mediterranean trade replacing the company’s cooperation with the 2M Alliance on this trade. In addition, the company terminated its slot purchase from MSC, which began in October 2018 on two lines in India-East Mediterranean trade and the company replaced this cooperation with an independent service line on this trade in December 2021 (ZMI). This service was extended to North Europe as of February 2022.

As of December 31, 2022, the company offered two services in the Cross-Suez geographic trade zone, which had an effective weekly capacity of 6,000 TEUs and covered all major international shipping ports in the East Mediterranean, the Black Sea, China, East and Southeast Asia and India.

Atlantic-Europe Geographic Trade Zone

The Atlantic-Europe geographic trade zone serves the Atlantic trade, which covers trade between North America and the Mediterranean, along with Intra-Europe/Mediterranean trade. The company’s services within this geographic trade zone also connect to Intra-Mediterranean and Intra-America regional feeder lines, which provide onward connections to additional ports. Since 2014, the company has had a cooperation agreement with Hapag-Lloyd and other companies in the company’s Atlantic services. In addition, the company has terminated its cooperation agreements with MSC in the Intra-Europe/Mediterranean trade and intend to replace this cooperation with an extension to North Europe on the company’s ISC-Mediterranean independent service. The company also has a cooperation agreement with COSCO in the Intra-Mediterranean trade.

As of December 31, 2022, the company offered 9 services within this geographic trade zone, with an effective weekly capacity of 8,759 TEUs, covering major international shipping ports in the East and West Mediterranean, the Black Sea, Northern Europe, the Caribbean, the Gulf of Mexico, and the east and west coasts of North America.

Intra-Asia Geographic Trade Zone

The Intra-Asia and Asia-Africa geographic trade zone serves the Intra-Asia trade, which covers trades within regional ports in Asia, including ISC (Indian sub-continent), Africa and Australia. The company’s services within this geographic trade zone feed into the global lines of the Pacific and Cross-Suez trades. This geographic trade zone is characterized by extensive structural changes that the company has made to respond to changes in trade and market conditions.

As of December 31, 2022, the company offered 32 services within this geographic trade zone with an effective weekly capacity of 20,505 TEUs. The company’s services within this geographic trade zone cover major regional ports, including those in China, Korea, Thailand, Vietnam and other ports in Southeast Asia, India, Africa, Thailand, Vietnam, New Zealand and Australia; and connect to shipping lines within the company’s Cross-Suez and Pacific geographic trade zones.

Latin America Geographic Trade Zone

The Latin America geographic trade zone consists of the Intra-America trade, which covers trade within regional ports in the Americas, as well as trade between the South American east coast and Asia and trade between the South American east coast and West Mediterranean. The regional services within this geographic trade zone are linked to the company’s Pacific and Atlantic-Europe geographic trade zones. The company cooperates with other carriers within the regional services: The company cooperates with Maersk via a vessel sharing agreement in the Asia-East Coast South America, and the company cooperates with other carriers on the Mediterranean- East Coast South America sub-trades mostly by slots purchase.

As of December 31, 2022, the company offered 13 services within this geographic trade zone, as well as a complementary feeder network with an effective weekly capacity of 3,642 TEUs and operated between major regional ports, including ports in Brazil, Argentina, Uruguay, Mexico, the Caribbean, Central America, China, the U.S. Gulf Coast, the U.S. east coast and the West Mediterranean; and connect to the company’s Pacific and Atlantic- Europe services.

Types of Cargo

Other Specialized Cargo

The company offers specialized shipping solutions through a dedicated team of supply chain experts that designs tailor-made solutions for the company’s customers’ specific transportation needs, issues approvals and documentation, arranges for insurance and provides other logistics services for all kinds of specialized cargo, including:

Out-of-gauge Cargo: Cargo that is over-weight, over-height, over-length and/or over-width can present many challenges and issues relating to proper stowage, securing and handling. The company maintains its containers to the highest standards and offer premium third-party services relating to these particular challenges.

Dangerous and Hazardous, Cargo: The company specializes in carrying Dangerous and hazardous shipments safely in accordance with all applicable local and international rules and regulations. The company ships a wide array of such cargos, and the company employs dedicated teams of specialists in five offices around the globe who are specially trained to guide the company’s customers through every stage of the supply chain challenges. The company has also developed and implemented ‘ZIMGuard’, an innovative artificial intelligence-based, screening software designed to detect and identify incidents of misdeclared hazardous cargo before loading to vessel.

Reefer Cargo: Reefer cargo includes perishable goods, pharmaceuticals and electronics. The company’s reefer specialists and merchant marine officers ensure the safe transport of reefer cargo with precise tracking and continuous monitoring throughout the cold chain. In addition, as the company strives to have the youngest reefer fleet in the industry, the company has also invested in new custom-made reefer containers already equipped with the company’s ZIMonitor capabilities, as well as in controlled atmosphere units which are designed to ship fresh produce cargo.

At the end of 2015, the company launched ZIMonitor, the company’s premium reefer cargo tracking service. ZIMonitor is a device attached to the engine of the reefer, and allows customers to track, monitor and remotely control sensitive, high-value cargo, such as pharmaceuticals, food and delicate electronics. The device monitors, among other things, GPS location, temperature, humidity and unnecessary container door opening. Customers can opt to receive alerts regarding their shipment via text message or email. ZIMonitor is designed to comply with the good distribution practice guidelines (GDP), which are applicable to the pharmaceutical industry, and to provide ongoing data flow, alerts in order to prevent cargo damage and automatic reports. Customers are also able to view their cargo status online on the company’s designated MyZim application. In addition, the company employs a 24/7 dedicated response team to promptly respond to hundreds of alerts daily.

Vessel Fleet

As of December 31, 2022, the company’s fleet included 150 vessels (139 container vessels and 11 vehicle transport vessels), of which nine vessels were owned by the company and 141 vessels are chartered-in (including 136 vessels accounted as right-of-use assets under the lease accounting guidance of IFRS 16 and 4 vessels accounted under sale and leaseback refinancing agreements). As of December 31, 2022, the company’s operating fleet (including both owned and chartered vessels) had a capacity of 549,278 TEUs. The average size of the company’s vessels is approximately 3,952 TEUs, compared to an industry average of 4,564 TEUs.

During the second half of 2021, the company has completed the purchase transaction of eights secondhand vessels, ranging from 1,100 to 4,250 TEUs each, in several separate transactions.

The company charters-in vessels under charter party agreements for varying periods. As of December 31, 2022, all of the company’s chartered vessel agreements consisted of chartering-in the vessel capacity for a given period of time against a daily charter fee, with 137 vessels chartered while the crewing and technical operation of the vessel is handled by its owner, including 6 vessels chartered-in under a time charter from related parties, and four vessels chartered-in under a ‘bareboat charter,’ which consists of chartering a vessel for a given period of time against a charter fee, with the operation of the vessel being handled by the company.

The company’s vessels operate worldwide within the trading limits imposed by the company’s insurance terms. As of December 31, 2022, the remaining average duration of the company’s chartered fleet was approximately 26 months, based on earliest period of redelivery.

As of December 31, 2022, the company’s fleet was consisted of vessels of various sizes, ranging from less than 1,000 TEUs to 12,000 TEUs, which allows for flexible deployment in terms of port access and is optimally suited for deployment in the sub-trades in which the company operates. As of March 1, 2023, the company’s fleet included 149 vessels (138 container vessels and 11 vehicle transport vessels), of which 9 vessels are owned by the company and 140 vessels are chartered-in (including four vessels accounted under sale and leaseback refinancing agreements) and the company’s owned and chartered container vessels had a capacity of 559,004 TEUs. As of March 1, 2023, this fleet included the newly built vessel ZIM Sammy Ofer, a modern dual-fuel LNG vessel with a capacity of 15,000 TEUs, which is the first among ten vessels of this type that the company chartered in a long term chartering transaction with Seaspan that are expected to be delivered to the company during 2023-2024.

Further, as of March 1, 2023, approximately 113 of the company’s chartered-in vessels are under long-term leases with a remaining charter duration of more than one year, as the company continues to actively manage its asset mix.

Strategic Chartering Agreements

Long term charter agreement for LNG-Fueled Vessels from Seaspan Corporation

In February 2021 the company and Seaspan Corporation entered into a strategic agreement for the long-term charter of ten 15,000 TEU liquified natural gas (LNG dual-fuel) container vessels, intended to be delivered between February 2023 and March 2024. Pursuant to the agreement, the company will charters the vessels for a period of 12 years with the option to extend it by additional charter periods. The company intends to deploy these vessels on the company’s Asia-U.S. East Coast Trade as an enhancement to the company’s service on this strategic trade.

In addition, in July 2021 the company announced a second strategic agreement with Seaspan for the long-term charter, of ten 7,000 TEU LNG dual fuel container vessels with an option for additional five vessels, to serve across ZIM’s various global niche trades, with vessels expected to be delivered during the fourth quarter of 2023 and throughout 2024. In September 2021, the company announced the exercise of an option granted to the company under this agreement to long term charter five additional 7,000 TEU LNG vessels, to be delivered during the third and fourth quarters of 2024. Following the exercise of this option, the total vessels to be chartered under this second strategic agreement is fifteen.

Long Term Charter Agreement for LNG-Fueled Vessels from a Shipping Company affiliated with Kenon Holdings Ltd.

In January 2022, the company entered into a new eight-year charter agreement with a shipping company that is affiliated with Kenon Holdings Ltd., the company’s largest shareholder, according to which the company will charter three 7,000 TEU LNG dual-fuel container vessels to be deployed in the company’s global niche trades. The vessels will be constructed at Korean-based shipyard, Hyundai Samho Heavy Industries and are scheduled to be delivered during the first and second quarters of 2024.

Charter Agreement with Navios Maritime Holdings Inc.

In February 2022, the company and Navios Maritime Holdings Inc. entered into a charter agreement for the charter of thirteen container vessels comprising five secondhand vessels and eight newbuild vessels. The five secondhand vessels’ capacity range from 3,500 to 4,360 TEUs and were delivered during the first and second quarter of 2022 and deployed across ZIM’s global network. The eight 5,300 TEU wide beam newbuilds are scheduled to be delivered during the third quarter of 2023 through the fourth quarter of 2024 and are expected to be deployed in trades between Asia and Africa. The charter period of the secondhand vessels is approximately 4.5 years, whereas the charter duration of the newbuild vessels is approximately five years.

Charter Agreement with MPC Container Ships ASA and MPC Capital AG

In March 2022, the company and MPC Container Ships ASA and MPC Capital AG entered into a new charter agreement according to which ZIM will charter a total of six 5,500 TEU wide beam newbuild vessels for a period of seven years. The vessels will be constructed at Korean-based shipyard HJ Shipbuilding & Construction and are scheduled to be delivered between May 2023 and February 2024.

Containers

In addition to the vessels that the company own sand charters, the company owns and charters a significant number of shipping containers. As of December 31, 2022, the company held 537 thousand container units with a total capacity of approximately 936 thousand TEUs, of which 37% were owned by the company and 63% were leased (including 55% accounted as right-of- use assets). In some cases, the terms of the company’s leases provide that the company will have the option to purchase the container at the end of the lease term.

Container Fleet Management

Below is a summary of the company’s logistics initiatives relating to container fleet management:

Slot Swap Agreements: The company enters into agreements with other carriers for the exchange of vessel space, or ‘slots’, for repositioning of empty containers. Under these agreements, other carriers offer ZIM space on their own operated vessels, in exchange for space on the company’s vessels for the purpose of repositioning empty containers. ZIM has greatly developed this cooperation. The company has slot swap agreements with 14 carriers and exchange thousands of TEUs each year.

Slot Sale Agreements: The company sells slots on board its vessels to transport empty containers.

One-way Container Lease: The company uses leasing companies and other shipping liners’ empty containers to move cargo from locations with increased demand to over-supplied locations. The company is a global leader in one-way container volumes.

Equipment Sub-leases: The company leases its equipment to other carriers and freight forwarders.

Operational Partnerships

The company is party to a large number of cooperation agreements with other shipping companies and alliances, which generally provide for the joint operation of shipping services by vessel sharing agreements, the exchange of capacity and the sale or purchase of slots on vessels operated by the company or other shipping companies. The company’s cooperation agreements provide the company with access to a wider coverage of ports and specialized lines, which enables the company to improve its transit times.

Strategic Cooperation Agreement with the 2M Alliance

In April 2022, the company amended and extended its agreement with the 2M Alliance to include the extension of the company’s collaboration on the Asia-U.S. East Coast (USEC) and Asia-U.S. Gulf Coast (USGC) under a full slot exchange and vessel sharing agreement originally established in September 2018 and August 2019, respectively. The strategic cooperation on the Asia-USEC includes a joint network of five loops between Asia and USEC, out of which one is operated by the company and four are operated by the 2M Alliance. In addition, the company and the 2M Alliance agreed to swap slots on all five loops under the agreement and the company could purchase additional slots in order to meet total demand in these trades. The strategic cooperation on the Asia-USGC includes two services, of which one is operated by the company, and one is operated by the 2M Alliance. The company has replaced its previous cooperation with the 2M Alliance established in March 2019 on the Asia – Mediterranean and Asia - American Pacific Northwest with the company’s own independent services. Furthermore, in January 2023 the members of the 2M Alliance announced the termination of the 2M Alliance in January 2025. The company intends to deploy its 15,000 TEU LNG dual fuel vessels expected to be delivered during 2023-2024 on the company’s operated service, ZCP, as part of the company’s joint Asia-USEC network with the 2M Alliance. This strategic cooperation with the 2M Alliance enables the company to provide the company’s customers with improved port coverage and transit time.

Customers

In 2022, the company had more than 34,000 customers using the company’s services on a non-consolidated basis. The company’s customers include blue chip companies, as well as a growing customer base of small- and medium-sized enterprises.

The company intends to continue to strengthen its relationships with the company’s key customers and to increase the company’s direct sales to small- and medium-sized enterprises, or SMEs, which the company defines as customers that ship up to 200 TEUs annually. This large and growing segment of the cargo shipping market represents a significant growth opportunity for the company within certain of the jurisdictions in which the company operates, including China, India, South-East Asia, the United States, Canada, Brazil, Israel, Turkey and Italy, wherein the company has a dedicated sales team for this growing segment. In addition, during 2021-2022 the company has increased its global deployment of services and presence by both establishing new local agencies and strengthening the company’s partnerships primarily in Southeast Asia, South America, Africa, Australia and New Zealand.

The company’s customers are divided into ‘end-users,’ including exporters and importers, and ‘freight forwarders.’ Exporters include a wide range of enterprises, from global manufacturers to small family-owned businesses that may ship just a few TEUs each year. Importers are usually the direct purchasers of goods from exporters, but may also comprise sales or distribution agents and may or may not receive the containerized goods at the final point of delivery. Freight forwarders are non-vessel operating common carriers that assemble cargo from customers for forwarding through a shipping company. A diverse mix of cargo from both end-users and freight forwarders ensures optimal vessel utilization. End-users generally have long-term commitments that facilitate planning for future volumes, which results in high entry barriers for competing carriers due to customer loyalty. Freight forwarders have short-term contracts at renegotiated rates. As a result, entry barriers are low for competing carriers for this customer base. The company’s relationships with large end-users give the company better visibility on future cargo shipping transport volumes while the company’s relationships with large freight forwarders, which generate cargo in many locations worldwide, help the company to optimize its trade flows.

Global Sales

The company has 23 full-time sales professionals in its headquarters in Haifa, Israel, and approximately 780 sales personnel worldwide in the company’s various agency locations (including in Israel). The company manages over 90% of its business on its unified information technology platform (CRM), which supports all the company’s business processes.

The company’s global network of services and the local presence of the company’s offices and agencies around the world enable the company to develop direct customer relationships, maintain a positive buying experience and increase the number of repeat customers. The company’s internal marketing team complements the company’s external sales efforts by providing training and support materials, such as marketing kits and question-and-answer documents and ensuring the consistency of the company’s brand messaging in its direct marketing, publicity, digital media and social media channels.

The company has dedicated strategic accounts teams located in the company’s headquarters in Haifa, supported by regional teams, working directly with the company’s strategic accounts, such as international freight forwarders and end- users (BCOs). The company’s sales team in the company’s headquarters works directly with sales executives in either owned, partially owned or contracted local agencies which perform the company’s primary sales and marketing functions and manage customer relationships on a day-to-day basis. The company has an ability to provide proactive and differentiated services level to the company’s strategic accounts in Asia and the U.S.

The company also employs specially trained and experienced sales experts for each type of specialized cargo the company carries, who are available to consult the company’s customers on the practical and regulatory requirements of shipping their cargo.

Suppliers

Vessel Owners

As of December 31, 2022, the company chartered approximately 94.2% of the company’s TEU capacity and 94.0% of the vessels in the company’s fleet.

Port Operators

The company has Terminal Services Agreements (TSAs) with terminal operators and contractual arrangements with other relevant vendors to conduct cargo operations in the various ports and terminals that the company uses around the world.

Bunker Suppliers

The company has contractual agreements to purchase approximately 85% of the company’s annual bunker estimated requirements with suppliers at various ports around the world. The company has been able to secure sufficient bunker supply under contract or on a spot basis. The company has strategic agreement with Shell.

Land Transportation Providers

The company has services agreements with third-party land transportation providers, including providers of rail, truck and river barge transport. The company is a party to a rail services agreement with some of the Class-1 service providers to main inland locations in the U.S.A. and Canada.

Seasonality

The company’s business has historically been seasonal in nature. As a result, its average freight rates have reflected fluctuations in demand for container shipping services, which affect the volume of cargo carried by the company’s fleet and the freight rates, which it charges for the transport of such cargo. The company’s income from voyages and related services are typically higher in the third and fourth quarters (year ended December 2022) than the first and second quarters due to increased shipping of consumer goods from manufacturing centers in Asia to North America in the anticipation of the major holiday period in Western countries.

Regulatory Matters

A variety of governmental and private entities subject the company’s vessels to both scheduled and unscheduled inspections. These entities include the local port authorities’ Port State Control (such as the U.S. Coast Guard, harbor master or equivalent), classification societies, flag state administration (country of registry), particularly terminal operators. Certain of these entities require the company to obtain certain permits, licenses, financial assurances and certificates with respect to the company’s vessels.

The company is subject to international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which the company’s vessels operate or are registered relating to the protection of the environment. Such requirements are subject to ongoing developments and amendments and relate to, among other things, the storage, handling, emission, transportation and discharge of hazardous and non-hazardous substances, such as sulfur oxides, nitrogen oxides and the use of low-sulfur fuel or shore power voltage, and the remediation of contamination and liability for damages to natural resources. These laws and regulations include OPA 90, CERCLA, the CWA, the U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (CAA), and regulations adopted by the International Maritime Organization (IMO), including the International Convention for Prevention of Pollution from Ships (MARPOL), and the International Convention for Safety of Life at Sea (the SOLAS Convention), as well as regulations enacted by the European Union and other international, national and local regulatory bodies.

The company is certified in accordance with ISO 14001-2015 (relating to environmental standards).

The company’s vessels are subject to standards imposed by the IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels.

The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the LLMC) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. The company’s vessels are in full compliance with SOLAS and LLMC standards. Additionally, the operation of the company’s vessels is based on the requirements set forth in the ISM Code. Each of the company’s vessels are ISM Code-certified.

Both OPA and CERCLA impact the company’s operations. The company has received certificates of financial responsibility from the U.S. Coast Guard for each of the vessels in the company’s fleet that calls the U.S. waters.

The company is also subject to Israeli regulation regarding, among other things, national security and the mandatory provision of the company’s fleet, environmental and sea pollution, and the Israeli Shipping Law (Seamen) of 1973, which regulates matters concerning seamen, and the terms of their eligibility and work procedures.

The company has developed and implemented a fleet-wide action plan to comply with the MLC to the extent applicable to the company’s vessels.

The company has implemented the various security measures required by the IMO, SOLAS and the ISPS Code and have approved ISPS certificates and plans certified by the applicable flag state on board all the company’s vessels.

In the U.S., the Ocean Shipping Reform Act of 2022 (OSRA) signed into law in June 2022 requires the company and all other carriers to immediately implement certain requirements in detention and demurrage invoices.

The company’s operations between the United States and non-U.S. ports are subject to the provisions of the U.S. Shipping Act of 1984, or the Shipping Act, which is administered by the Federal Maritime Commission (FMC).

The company’s operations involving the U.S. ports are subject to FMC oversight under the Shipping Act and FMC regulatory requirements relating to carrier agreements, tariffs and service contracts, and certain ‘Prohibited Acts’ under Section 10 of the Shipping Act.

The company’s operations involving the European Union are subject to E.U. competition rules, particularly Articles 101 and 102 of the Treaty on the Functioning of the European Union, as modified by the Treaty of Amsterdam and Lisbon.

The company’s operations in Israel are subject to Israeli competition rules, primarily the Israeli Economic Competition Law, 1988, or the Israeli Competition Law, and the regulations and guidelines thereunder.

Competition

The company competes with a large number of global, regional and niche container shipping companies, including for example, Maersk, MSC, COSCO Shipping, CMA CGM S.A., Hapag-Lloyd AG, ONE and Yang Ming Marine Transport Corporation to provide transport services to customers worldwide.

History

ZIM Integrated Shipping Services Ltd. was founded in 1945. The company was incorporated in 1945.

Country
Founded:
1945
IPO Date:
01/28/2021
ISIN Number:
I_IL0065100930

Contact Details

Address:
9 Andrei Sakharov Street, PO Box 15067, Matam, Haifa 3190500, Israel
Phone Number
972 4 865 2111

Key Executives

CEO:
Glickman, Eliyahu
CFO
Destriau, Xavier
COO:
Arbel, David