Wallenius Wilhelmsen wins US$ 1 billion shipping deal

Oslo-listed RoRo shipping company Wallenius Wilhelmsen has signed a multi-year contract worth USD 1 billion with an unnamed ‘global player’ in the premium car segment, covering both shipping and logistics services.

The multi-year contract has a duration of three years, plus a mutual two-year extension option. The contract started between January and April 2024 with rates in line with current market levels, according to the company.

“We see manufacturers shifting priorities and increasingly looking for solutions which provide predictability in their supply chains. In this case, it means longer-term contracts encompassing both logistics and shipping services. This goes hand in hand with Wallenius Wilhelmsen’s goal of being a total solution provider in finished vehicle logistics. This multi-year contract allows for better long-term planning and extended predictability both for the customer and us,” says Lasse Kristoffersen, President, and CEO at Wallenius Wilhelmsen.

The contract also includes the use of biofuels by Wallenius Wilhelmsen’s ships. Car manufacturers are increasingly embracing sustainable practices, with a notable shift towards incorporating biofuel usage in their logistics and shipping contracts.

Specifically, Wallenius Wilhelmsen has launched its Reduced Carbon Freight Service, whereby through the utilization of B30 Biofuel, customers can typically reduce their Scope 3 CO2/GHG supply chain emissions by approximately 20-25%.

“Environmentally conscious customers recognize the urgency when it comes to decarbonizing global supply chains. Using biofuel is a strategic decision for this customer,” says Pia Synnerman, Chief Customer Officer at Wallenius Wilhelmsen.

This marks Wallenius Wilhelmsen’s fifth multi-year contract signed this year, bringing the cumulative total value of all contracts to USD 1.79 billion. These contracts have predominantly included the use of biofuel as well.

Wallenius Wilhelmsen’s financial performance in 2023 marked its strongest on record. The combination of capacity constraints in the car carrier markets and a general uptick in demand for cars and heavy equipment contributed to robust earnings and the renewal of multi-year contracts at rates aligning with prevailing market conditions. The company said that its shipping segment delivered a record adjusted EBITDA of USD 1,527 million, up 12 percent YoY.

Driven by healthy market demand, as well as its sustainability target of becoming a net zero company by 2040, Wallenius is investing in fleet renewal.

In February 2024, Wallenius Wilhelmsen declared options to build four additional next-generation Shaper Class pure car and truck carrier (PCTC) vessels.

The 9,300 CEU (car equivalent unit) methanol dual fuel vessels can utilize alternative fuel sources, and they will also be ammonia-ready. These vessels will play a key role in the introduction of Wallenius Wilhelmsen’s net zero emissions end-to-end service by 2027.