Ladies and gentlemen, thank you for standing by. I'm Natalie, your conference call operator. Welcome and thank you for joining the ZIM Integrated Shipping Services Ltd Q1 2022 Earnings Conference Call. Throughout today's recorded presentation, all participants will be in listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I'd like to turn the conference over to Elana Holzman, Head of Investor Relations. Please go ahead. Thank you, Natalie, and welcome to ZIM's first quarter 2022 Financial Results C onference C all. all. Joining me on the call today are Eli Glickman, ZIM's President and CEO, and Xavier Destriau, ZIM's CFO. Before we begin, I would like to remind you that during the course of this call, we will make forward-looking statements regarding expectations, predictions, projections of future events or results. We believe that our expectations and assumptions are reasonable. We wish to caution you that such statements reflect only the company's current expectations and that actual events or results may differ, including materially. You are kindly referred to consider risk factors and cautionary language described in the documents the company filed with the Securities and Exchange Commission, including our 2021 annual report filed on Form 20-F on 9 March 2022. We undertake no obligation to update these forward-looking statements. At this time, I would like to turn the call over to Zim's CEO, Eli Glickman. Eli. Thank you, Elana, and welcome everyone to today's call. Following an extraordinary 2021 for ZIM, we carried out our strong momentum into 2022. I am proud to present another quarter of record results and exemplary execution. I believe that we are very well positioned today as an innovative provider of seaborne transportation to capitalize on market tailwinds and continue delivering superior profitability. Before I dive into our quarterly highlights, I would like to address the situation in Ukraine. The continued violence saddens us deeply. In an effort to support the people of Ukraine, we have donated to IDF and operate a field hospital to care for those affected by the war. We also continue to support our Ukrainian employees, customers, and partners in any way we can. As I have stated previously, our duty to help preserve human life exceeds all other considerations. Now, turning to ZIM's Q1 and year-to-date accomplishments. As highlighted in this slide number three, we maintain our strong trajectory into 2022, delivering another outstanding quarter of financial results due to the proactive strategies we have implemented to capitalize on both the highly attractive market and the ZIM differentiated strategy. In Q1, we generated record revenues of $3.7 billion, record adjusted EBITDA of $2.5 billion, and record net profit of $1.7 billion. Shareholders' equity was $4.3 billion at the end of the quarter. Consistent with our focus on profitability, we achieved exceptional margins as well, 68% for adjusted EBITDA and 60% for adjusted EBIT. We continue to outperform the wider industry average as we have done for several quarters. Our results also stand out operationally as we grew our carried volume by 5% in Q1 compared to Q1 last year. This is an impressive achievement, particularly given that global volume decreased by almost 2%. Slide number four, you can see that our strong performance to date, combined with the 2022 long-term contract rates that we execute, boost our confidence with respect to our 2022 guidance. The average rate of our long-term contracts, which took effect starting about two weeks ago in May third, reflect a rate increase in excess of 100%. In other words, more than double as compared to 2021. These long-term contract rates illustrate customer expectation for both sustained demand for capacity as well as the continuation of a very strong rate environment. As such, we are raising our full year 2022 guidance and now expect to generate adjusted EBITDA between $7.8 billion-$8.2 billion and adjusted EBIT between $6.3 billion-$6.7 billion in 2022. It is also noteworthy that our exceptional performance allows us to continue to return substantial capital to shareholders per our policy to distribute a dividend to shareholders on a quarterly basis at the rate of 20% of net income. Our board declared a Q1 dividend of $2.85 per share. Slide number five. We remain focused on executing across our strategic pillars, including operational excellence. The core company has been strengthening our commercial proposition and improving our cost structure by securing fuel efficient newbuild capacity. Following our first long-term charter agreement for 10,000-15,000 TEU LNG dual fuel vessels intended to serve our Asia to U.S. East Coast service, our focus shifted to highly versatile vessels. Since the beginning of 2022, we announced three charter agreements for a total of 17 newbuild vessels with total TEU capacity of approximately 96,000. We added three 7,000 TEU LNG dual fuel container vessels to the 15 vessels already secured in 2021, as well as eight 5,300 TEU vessels and six 5,500 TEU vessels. This is modern and efficient tonnage particularly well-suited to serve on our expanded network of expedited services as well as other regional services. This versatile fleet will allow us to maintain our flexibility and strengthen our market position and commercial offset. In total, we secure 46 newbuild vessels scheduled for delivery starting in Q4 2022 and throughout 2023 and 2024. Our fleet chartering strategy will enable us based on prevailing market conditions in the future to decide whether these new vessels will represent an expansion of our fleet or replacement. It is also important to highlight that of these 46 new vessels, 28 are LNG powered. Consistent with our sustainability core value, we continue to position ZIM at the forefront of the carbon intensity reduction among global liners and to support our customers to meet their own ESG objectives. We anticipate becoming the first container shipping company to deploy LNG vessels on the Asia to U.S. East Coast trade. When we take delivery of these green LNG fueled vessels, which will represent approximately a third of our operating capacity, ZIM will be more carbon and cost efficient than it is today, improving our competitive position. I would also remind you that the road to decarbonization in our industry is an opportunity for ZIM. Given our mostly chartering capacity, we can easily replace our operated capacity to more environmentally friendly tonnage. Moreover, by opting to charter these LNG vessels rather than own them, we are also maintaining flexibility to transition to newer technology if and when it becomes commercially viable. Slide number six. You can see that our ability to adjust our fleet size to market conditions and identify market opportunities are a direct result of our operational and commercial agility and other strategic pillars. ZIM now has an established track record of making nimble adjustments to meet changing market conditions, optimizing vessel deployment, supporting high utilization of vessels, and exploiting specific trade advantages to drive outstanding results and superior profitability. Since the beginning of the year, we've increased our operating capacity by approximately 11%, and we currently operate 137 vessels. It is important to remember that we have added significant operating capacity in recent weeks in anticipation of the changes to our collaboration with the third party. ZIM's exceptional success is based on our ability to act decisively and adjust quickly. We continue to identify new market opportunities, advancing our global route strategy to meet customer demand. Last time, 2022, we have launched 10 new lines, including six that are expansion of our network and four replacement lines to better meet our customer needs. Notably, in keeping with our focus on promoting alternative modes of transport for e-commerce customers, we recently launched our Baltimore Express line, ZXB, a first of its kind seasonal summer service from China and Southeast Asia to the U.S. East Coast, operated exclusively by ZIM. As part of our vision strategy, we identified this opportunity to add another building block in our ZIM performance express line and launch the Baltimore service to inland customers seeking a competitive alternative to air freight. Importantly, ZXB offers customers a wide range of advantages, including expedited rail, air, and road connections to inland destinations. Finally, as we discussed on our previous earnings call, we've extended our cooperation and collaboration with the 2M lines on the Asia to U.S. East Coast and U.S. Gulf Coast trades, while we move to ZIM independent services in the Asia to NE and PNW trades. The collaboration is now operating on the basis of a slot exchange and vessel sharing, making ZIM an equal partner in these joint services. We continue to meet growing demand and competitively serve our customers, particularly on three transpacific routes. I will now turn the call over to Xavier, our CFO, for his remarks on our financial results and market development. Please. Thank you, Eli, and again, welcome everyone. We delivered another quarter of outstanding financial performance as a result of both historically high freight rates as well as our differentiated and proactive approach. The slide seven here illustrates our strong results and significant improvements across key operational and financial indicators versus the prior year respective quarter. Our record results were once again driven by continued positive market conditions, which kept freight rates significantly higher than prior year. We have continued to prioritize vessel clean cargo and undertaking initiatives to capitalize on e-commerce demand, which enabled us to improve cargo mix. Specifically, our average freight rate per TEU of $3,848 in the first quarter was 100% higher compared to the first quarter of 2021. That was 6% higher than our average freight rate in the preceding quarter. Our free cash flow in the first quarter totaled $1.5 billion, compared to $645 million in the comparable quarter of 2021, an increase of 130%. Turning to our balance sheet, total debt increased by $984 million since prior year-end, mainly driven by the increased number of vessel fixtures, longer charter duration, as well as higher daily charter rates. Over the same period, our cash position grew substantially by approximately $1.3 billion. As a result, for the second consecutive quarter, ZIM's net debt has been driven down to a level at which the company closed the period in an effective positive net cash position. Our fleet management strategy to maintain optionality to match capacity with demand remains intact. We believe that ZIM has retained the ability to adapt our fleet size to changing demand fundamentals. The average remaining duration of our current chartered capacity today is 28.6 months, slightly up from the 26.1 months in March 2022. Bridging our current operating capacity to the scheduled delivery of our newbuild vessels. Also, only 11 of our chartered vessels are now scheduled for renewal between now and the end of 2022. Twenty-eight will be renewed in 2023, and 34 potentially also renewing in 2024. In contrast, you can see that we are delivering consistent improvement in earnings. At the same time, our net leverage has trended downward from two point four in Q1 2020 to zero. Importantly, we continue to be positioned in the top tier of our industry in regard, reflecting the strength of our balance sheet. Moving on to the next slide nine. Our proactive strategy continued to generate record results. Revenue for the first quarter was $3.7 billion compared to $1.7 billion in Q1 2021, driven primarily by improved freight rates and to a lesser extent, also an increase in carried volume. Most importantly, we grew profitably with Q1 net profit of $1.7 billion, representing a 191% year-over-year increase. Adjusting EBITDA was $3.5 billion for the quarter, compared to $821 million in the first quarter of last year. That is an improvement of over 200%. Consistent with our focus on delivering industry-leading margin, adjusted EBITDA and EBIT margins were 68% and 60% respectively, as compared to 47% and 39% in the first quarter of last year. Those margins were comparable to margins we delivered in the prior quarter. I would like to note that as anticipated, ZIM is currently incurring 23% corporate income tax rate in Israel. In Q1 2022, we then began being tax-exempt, and as such, during the first quarter, we paid tax expense in a total amount of $226 million. Moving on to slide 10. We continue to outpace the industry in terms of growth in carried volume without compromising our profitability. We carried 859,000 TEUs in the first quarter as compared to 818,000 TEUs during the same period last year. We grew our carried volume by 5% while the general market contracted by almost 2%. Volume growth in Q1 in non-transpacific trade did compensate for the decline in transpacific volume, which was negatively impacted by congestion. Sequentially, our Q1 2022 carried volumes were flat compared to Q4 2021 while again here the overall market shrunk by over 6%. Regarding our cash flow, we ended Q1 2022 with a total cash position of $5.1 billion, which includes cash and cash equivalents and investments in banking and other investment instruments. We remind you that in April, we paid a dividend totaling approximately $2 billion. During the first quarter, our adjusted EBITDA of $2.5 billion converted into $1.7 billion cash flow from operations. Other cash flow items in the first quarter included $177 million of net CapEx and $249 million of debt service. The first quarter of 2022 CapEx mainly related to the secondhand vessels we purchased in Q4 last year that we got delivered in the first quarter of this year. Moving to our guidance. We are raising our full year guidance and now do expect to generate adjusted EBITDA between $7.8 billion and $8.2 billion and adjusted net between $6.3 billion and $6.7 billion. The main reason for improved outlook for 2022 is better than initially anticipated contract mix. Volume growth is expected this year to be approximately 5%. Other assumptions we provide in March do remain largely unchanged. Turning to market and industry trends and our positive view moving forward. The combination of port congestion and strong demand, especially in the United States, are the underlying factors shaping the strong market we are currently experiencing. Port congestion and supply chain disruptions have been a persistent strain on container shipping operations for over a year now. This reality is not expected to be resolved in the near future and may even spill into 2023. Drewry estimates that long queues of ships waiting outside ports and slower ship turnaround resulted in effective container ship capacity being 17% below its potential in 2021. The forecast for 2022 has also increased from 12% in March to 15% today, and they project port congestion to absorb 7% of effective capacity in 2022. Transport ocean timing indicator demonstrates the depth of port congestion. As you can see, the end-to-end transport time from the exporter's location to the port of destination on China to U.S. routes, which stood at 45 days pre-pandemic, more than doubled and is currently estimated to be around 73 days. This longer supply chain creates demand for more vessels and containers to absorb the significantly longer voyages. It is important to remember that congestion cannot be viewed as port specific. Rather, a more global holistic view should be taken. As we saw recently, as the queue outside the port of L.A. and Long Beach shortened, congestion in East Coast ports started to build up. These measures show no signs that the supply chain crisis has passed. The next slide shows that demand in the United States is expected to remain robust in the near future. Continued disruptions of global supply chains are expected to support high demand for container shipping, as shippers are looking to guarantee space to maintain required inventories. Despite growing inventories in the United States, strong demand results in inventory to sales ratio remaining at a level which is far below pre-COVID or normal levels. You can also see here on the right that global volume in March 2022 is higher by 6% when compared to 2019, the last normal year experienced by our industry. Moving on to the next slide. The overall supply/demand balance remains positive for 2022, despite projections for 2022 being adjusted downward due primarily to the impact of the lingering war in Ukraine and China's zero-tolerance COVID policy. The supply/demand balance reverses in 2023, when more significant new-build delivery, including this during ours, are expected. The order book has also consistently grown over the past several months, yet our view of market fundamentals for the near and midterm remains overall positive. We believe that the increased order book is at least partially a response to the anticipated pressure to decarbonize shipping and renew aging fleet. With major retailers taking more aggressive reduction in carbon emission than on basic, the motivation to scrap older, less efficient vessels will grow, reducing the growth in effective capacity. Supply chain disruptions will also partially offset the effect of new building delivery in 2022. Next is the more shorter. In the shorter term, we show that the decline in freight rates since January 2022 is indeed consistent with typical seasonality impacting the first and second quarters of the year. The graph on the left shows a similar seasonality trend for the 2022 SCFI Comprehensive Index when compared to previous year prior to and following Chinese New Year. We believe that the Shanghai lockdown contributed to the slower spot rate recovery this year compared to prior year. Yet, when manufacturing in China returns to normal and demand picks up in peak season, the added volume may put additional pressure on already strained supply chain and congested ports in the United States and elsewhere. The graph on the right compares the development of freight rates from 2018 to 2022 to date. Again, demonstrates the price decline in Q1 are consistent with typical seasonality. The downward trend in 2022 extended longer than prior years, again, most likely due to the Shanghai lockdown, but we are starting to see rate stabilization in Q2 as would be expected. With respect to our overall expectations for freight rates, we would contend that certain factors, including the sustained historically higher than average freight rates now entering their third year in a row, structural changes in container shipping, vertical growth strategy being pursued by various liners, and higher costs incurred by all players will keep freight rates from declining to pre-COVID levels when rates finally normalize. With that, I will turn the call back to Eli for his concluding remarks. Thank you, Xavier. We continue to deliver on our commitment to outstanding execution and profitable growth while positioning ZIM for long-term success. As Xavier just outlined, strong underlying market fundamentals support our optimism for the future as we leverage our global niche strategy to meet growing customer demand. Importantly, we have secured fuel-efficient newbuild capacity that will strengthen our market position and commercial prospects moving forward while maintaining ample flexibility in our operated capacity. We are pleased with our incredible progress today as a public company and excited to carry our momentum forward, continuing to advance ZIM's position as innovative digital leader of seaborne transportation and logistics services to maximize value for all stakeholders. We will now open the call to questions. Thank you very much. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is Sathish Sivakumar from Citigroup. Please go ahead. Hi. Thanks again for the presentation. I got two questions. Firstly, on the contract rates, right? Obviously, your rates are being almost doubled. If you could give some color on, given the spot rates, how they moved so far, what are you actually seeing on your contract rates? Because Asia to U.S. is probably the negotiation is just starting on, right? Would you see that there is even more further upside as you go into Q2? How should we think about contract rates element alone? The second one, you know, obviously, if you look at your guidance and like you took your EBITDA for Q1, and what does it imply in terms of H2 actually? Do you expect like a steep normalization in rates? Because in one of your slides, you do say that, disruptions might extend into 2023. I just wanted to understand what does it mean in relation to your spot rate expectations as you go into H2. Then, sorry, if I could ask the third one, what is your current visibility on demand in terms of bookings that you see in your systems? Like, do you have, let's say, two months, three months visibility? How does that compare with, let's say, back in 2019? Yeah, those are my three questions. Thank you. Yes. Starting with the first one. I think the first one and the second one are quite intertwined, actually. The contract season for us on the Transpacific is starting from the first of May and will extend up until the thirtieth of April next year. What we have done over the past few weeks is finalize all the discussions with our customers on the Transpacific trade to agree on both the allocation and the rates that will prevail for the next 12 months. This is because we have concluded on average a rate that we are higher than what we initially anticipated when we were in the middle of those discussions when we last talked in March, two months ago. We at CMA CGM explained that CMA CGM explained why we are increasing our guidance. We increased the guidance on the back of higher than anticipated contract rates that will start to kick in, or started to kick in the first of May. We now believe impact Q3 and Q4, so the second half of 2022. With respect to what we anticipate in terms of spot market, what the spot market might do, and again, there is a lot of uncertainty today, but we need to make assumptions and work with those. We made still the assumptions in and that is in our guidance that the spot rates will start to normalize in the second half of this year. That to some extent, the reduction in the spot market will be offset by the incremental revenue that we will generate on the contract cargo compared to last year. We still take a conservative view in that sense, but we believe that it is a possibility that the spot market will start normalizing in the second half of this year. When talking about, I think, the third aspect of your question, what do we see in terms of the demand? Currently, as you know, there is the situation that has been affecting the whole of the industry, especially relevant in Shanghai with the lockdown of Shanghai, and Shanghai being a very important, relevant export place out of China. There's been a reduction in volume out of Shanghai. We are also hearing and reading the same as I think you do, that the situation should start to resume and production should start to resume, and lockdown should start to ease, so that by the end of June, production should go back to normal as far as Shanghai is concerned. Up until today, we have managed to compensate the shortfall of export cargo from Shanghai by reallocating some of our volume to South China and also Southeast Asia. At some point, indeed, if the situation was to remain as is, and if the manufacturing sites were not allowed to come back to production, then the situation would deteriorate. We don't see that happening. In terms of booking forecast, looking at our filling factor, the vessels for the weeks to come and for the few months or couple of months to come, are expected to sail full. You do have visibility up to two months, I think. That's today. Yep. I'm sorry, say that again. No, I just wanted to clarify. You've got about two months of visibility in terms of demand booking. Yeah, on the spot. On the contract, we have a little bit more than that due to the nature. Not only do we negotiate contract rates, but more importantly for our customers today, rather than the volume. Okay, got it. Can I ask you another quick follow-up, actually? You've outperformed on volume growth and versus the overall market, right? What is actually driving that? Is it because of your exposure to Transpacific or how should we think about, like, say, for the remaining part of the year? If we look at the first quarter where we generated an increase of 5% versus the same quarter last year, we were affected by the, you know, the congestion on the Transpacific. We carried a bit less cargo than what we initially anticipated. Where we have been extremely active in growing our network is on the intra-Asia trade. We've opened quite a few new lines within the intra-Asia region, including between Southeast Asia to Australia. The growth on intra-Asia has been quite dynamic and allowed us to compensate for the, you know, the slight reduction we've seen in volume due to the congestion. Okay. On the year. Okay. Yeah. Thank you. That's quite helpful. Thank you very much. The next question is from [Omar Nokta] from Bank of America. Please go ahead. Thank you. I was wondering if you could talk about the union negotiations at the Port of L.A. in Long Beach. What are you hearing and what is your expectation for that? Is that a risk for further disruption going into peak season? Secondly, in terms of like new deliveries for the market that are expected in 2023, could those be delayed because of the lockdowns in China and disruption on supply chains? Thank you. Yes. First, the first question with regard to the current discussions, the union discussions Port of L.A., very difficult for us to comment on what could be the outcome. What we can say is, as is always the case, we hope for the best and get ready for the worst. It is a threat and a potential risk to the current routine supply chain disruption. We've seen some of our customers redirecting some of their cargo already in anticipation of what could be the outcome of the discussions or if there was to be some action or some inaction in the Port of L.A. Some of the cargo has been moved already from the U.S. West Coast to the U.S. East Coast, which also explains to some extent why there is an increase in the congestion of the U.S. East Coast terminals. With respect to your second question, as we all know, 2022 is not gonna be a year where we see significant new building being delivered in our industry. 2023, on paper at least, and 2024, indeed are, or they're expected to be years where significant amount of new tonnage are expected to be delivered. It is possible, and time will tell, it is possible that the initial planning, and we are sensing that some shipyards, especially in China, maybe more than the shipyards in Korea, are being affected, as you suggested, by the Zero-COVID policy that is being enforced in China, may struggle to deliver the vessels, as per the original schedule. There might be some sliding in terms of delivery of the new building capacity in 2023 to a little bit late. As far as these vessels are concerned, because you know that we are expecting some vessels in 2023, the first one being expected to be delivered in February 2023. We seem to be on schedule. Thank you. Can you comment on what sort of demand you're seeing right now from the U.S., and have you seen any change in recent weeks? Today the demand is still extremely strong, and I think this is what we want to illustrate when we show and we keep on displaying that graph, which is the inventory to sales ratio in the U.S., which is for us a key metric that we track. There is, what's going on in Asia, is one point of reference. The other one is you see that the crisis in Europe, Russia, Ukraine is also having some effect on Asia and Europe trade lanes. If we look at the Asia Transpacific trade, which is the one we are exposed to, as we are not exposed to Asia-Europe and Europe, as you know, the dynamic is not the same. The demand in the U.S. is still extremely resilient, is still extremely strong, and we don't see, or we haven't experienced so far any softening more than we would expect in terms of seasonality, on that front. Customers are still looking to ensure that the space that we have allocated to them is still a space that they will be able to enjoy in the coming weeks. There is all the orders that have been placed prior to the Shanghai lockdown are still there, and will need at some point to be lifted from China, Southeast Asia to the U.S. What may also happen is the, you know, pre-Thanksgiving, pre-Christmas shopping season, which is the peak season for us in our industry, might start earlier than initially anticipated. If all the stars are aligned and the Shanghai lockdown indeed ends before or somewhat towards June, the overall situation could be that there will be a surge in demand as early as July. Thank you. The next question is from the line of Chris Robertson from Jefferies. Please go ahead. Good morning, and thank you for taking my question. Morning. My first question is on the current average time charter duration. Could you talk about the average time charter duration? On average, what% of your operated fleet rolls off charter per quarter or per year? The average remaining. If we look at what we have, we operate 135 vessels, so 137 vessels today. Pretty much all of them are on charter, with the exception of the secondhand vessels that we acquired late last year. They are all on charter. In terms of charter duration, they are all on charter for more than a year, or that's contracted for more than a year. The average remaining duration of the book of charter that we have is now 28 months. When we renew a contract or since already two thousand and Late 2020 and throughout 2021 and to date here in 2022, when we renew a charter, when we fix a vessel, the average charter duration is between three to five years. That has not changed, I think, since now three or five quarters in a row. That's the rule of thumb that we should bear in mind. Three to five years. Now, when it comes to, and I think this is a very important point that you're raising in the second part of your question, what is left in terms of a fixture that we commit for renewal in the quarters to come and looking ahead into 2023 and into 2024, we have out of the 137 vessels today that we operate, 11 vessels for which the charter will come to an end between now and the end of the year. It is likely that we will want to renew those charter, and we might enter into charter contracts for duration between three to five years for those 11 vessels out of the 137 vessels. We are not that exposed to the spot charter market for the remainder of 2022. I am looking ahead into 2023 and into 2024, that's where we recover the flexibility that we need and that we want in order to leave room for the new buildings that will be delivered to us in 2023 and in 2024. In 2023 we have 28 vessels or charters that will have come to an end, and in 2024, we have another 34. That's 62 vessels all together that will come to an end in terms of chartering agreement. To put things into perspective, to be compared with the 46 new buildings that will be chartered to us over the same period. Okay. Yeah, thanks for that. My second question is on the new Baltimore Express line, and you can speak generally too on the other express and also the e-commerce lines. How should we think about that in terms of of earning a premium versus kind of the market average rate? Yes. Those lines that are dedicated to time-sensitive cargo, the objective is to ensure that the transit time is as short as it can be, and also that we have, once the vessel arrives at the terminal berth on arrival, that we have the chassis ready, that the inland transportation onto a rail can be organized swiftly. This is the whole service that we provide to a customer when they book on those specific lines. Yes, they do command a premium. It is difficult to, you know, to price it or to give an indication as to what is the percentage of premium that we are generating on those trade lanes. We generate on average better income or better margin per TEU than we would on a more traditional line. Okay. My final question, it's kind of following up on the first question asked around your EBITDA guidance. What percentage of the EBITDA guidance is kinda locked in based on your contract negotiations versus what is exposed to fluctuations in spot? When we look at the cargo mix or the trade mix where we currently operate, 45% of our volume is Transpacific, the rest is non-Transpacific, intra-Asia, Atlantic, Asia to South America. 45% is Transpacific, and that is where we are talking about a long-term contract. 50% of our volume will be or are contracted on a long-term contract basis, and 50% will remain exposed to spot. From a volume perspective, we can think that a bit more than 25% of our volume is contracted. We can apply that first, you know, line of criteria. The second one that obviously needs to be taken into consideration is that the Transpacific in terms of profitability may differ to the other lines in terms of volume TEU, in terms of EBIT margin per TEU. From a profitability perspective, it is more of the 25% I just talked about that is being locked in already in for the future quarters. Okay, great. Yeah, thank you for the color, and I appreciate the time. The next question is Alexia Dogani from Barclays. Please go ahead. Yeah, good afternoon, and thank you for taking my questions. I also have three. Just firstly, Javi, on your comments that you're now operating 137 vessels. That is a significant increase from the 125 we talked about at the previous call, and yet carriage volumes are in line this quarter with the prior quarter. Can you just talk a little bit about utilization of these assets in the most recent period and how you expect that to move ahead, I guess, as the lines pick up? So that's one kind of clarification on the capacity. If you're able to give us a forward-looking capacity plan in terms of size of fleet, that would be very useful. Just secondly, on the customer mix or product mix on the volumes you carry, is there high level number you can give us in terms of exposure to e-commerce or retail? I guess I'm trying to understand what else can balance off if there is some weakness from retail demand. I mean, you know, news from some of the largest U.S. retailers is a little bit confusing in terms of the sales growth being driven by price rather than volume, and clearly there are associated implications. Any color you can give there would be great. The final question is on labor cost inflation. Is there something to flag in terms of kind of seafarer wages going up in line with inflation, or is it more nuanced? Thank you. Thank you. Thank you, Alexia. Maybe on the first part of your question with regard to the fleet, the utilization, 137 vessels compared to the 125. We are operating more vessels, and remember as well that we increased the size of our fleet also to adjust to the new relationship with the partnership we have with the 2M. Now we replace also a slot that we used to buy on board our partners with our own capacity. That explains also to some extent why we are operating more vessels, and you don't see the exact same translation in terms of cargo quantity because like I said, we used to be a net buyer of space on board our partners' vessels. Second element, which I think is important in terms of us asking about utilization. Utilization is extremely strong and has been, you know, very close to 100%, on every single voyage. The one thing that have had an impact nevertheless is the congestion issue, the waiting time, meaning that that translated into a longer transit time to carry the same volume of cargo from one place to the other. There's been less voyages as a result of the port congestion that had an effect on the overall transit time of, you know, moving the goods from A to B. Utilization, very strong. Vessels, more vessels to adapt our fleet with the transformation ship with the 2M. The volume also in line with the impact of the congestion. Looking forward to the capacity plan that is ours, we want to make sure and we have taken all the necessary steps already to ensure that for our whole alliance, that we have a very strong foothold, that we have the capacity that we need in order to not only defend, but also improve our competitive position in those very important trade lanes. This is very much the 46 newbuilding vessels that we referred to earlier on that will come our way in 2023 and 2024, which will allow us to get a very efficient end between the tonnage that the position is very strong. We will continue to explore alternatives and options and where we see opportunities to enter into new tradelines, if it does make sense, we will. This is why we are very pleased to see that we will have the option to do so, because as I was referring to earlier on, in 2023, 2024, the 20 or 62 vessels that we promised for renewal, if we see that there are opportunities for us to enter into new trades, then we will renew those charter on top of the one or some of them, on top of the new capacity that we will get later this year. We will have the option, but the obligation to operate more vessels into the coming years. The third question that you raised, the question was about e-commerce percentage of our activity. We've been, I think, very aggressive in entering into this type of trade, starting with our liaison between Asia, Southeast Asia, China to LA, and then we expanded to same type of a trade between Southeast Asia to Australia and New Zealand. Now we just announced the opening of the same trade lane between a similar service, sorry, between Asia to the U.S. East Coast. The reason why we're opening those lines is because there is a demand, and our customers do wish that we provide this type of solution to them. There's a split in terms of e-commerce trade lane. If you look at what it was over 2021, pretty much 25% of our Transpacific trade and to a lesser extent on the intra-Asia as well, with the Australia maybe 20% of our intra-Asia trade were very much e-commerce trade lane. The last question, which is what about cost of employment? Obviously with the current situation impacting Ukraine, and as we all know, Ukrainians are great seafarers and we have a lot of seafarers, Ukrainian seafarers on board. For us, it has a limited impact because largely, as we mentioned, we are chartering in the capacity that we operate. As part of the charter rate, the daily rate that we do pay to the tonnage owner, that includes as well the manning of the vessel, the ship management of the vessel. That includes the seafarer wages and the technical support. If there is an impact, it's more for the tonnage owner than it is for us to absorb. Thank you. Thank you very much, Xavier, for that. Can I just ask one follow-up on the contract portfolio, actually? You haven't really changed your mix of contracted volumes. I mean, is there an opportunity to increase that 50% of the Transpacific to a higher level that locks in some of these increases for longer? Or are you more confident on the spot market? We could have decided to increase the volume that we would contract on a long-term basis. It was not a lack of a demand in this respect from our customers. Through the discussions, the first question that we were addressing with our customers was the amount of the space that we could allocate to each and every one of them. It was more a strategic decision from the company to stick to the 50% allocation between contract and spot, as we also like to be able to benefit from the spot market, especially during the peak season, where normally it is to be expected that the spot can outweigh the contract rate. That has been a recipe that has worked for ZIM over the past few years, and we didn't see any reason to change drastically on that front for this very specific contract season. Great. Thank you very much. The next question is from Sam Bland from JP Morgan. Please go ahead. Hi, thank you. Thanks for taking the question. I've also got three, please. First one is on these Transpacific contracts. I think they've roughly doubled. The rate has doubled. Could you talk about where the contracted rates are that have been agreed versus the current spot rate on that particular lane, please? The second question is on the 46 vessels. I think on at least some of those, maybe all of them, there's an option for a sort of upfront payment. Could you just kinda confirm if that's on all 46? And if so, you know, is it known how big that upfront payment could be in 2023 or 2024, or is there some flexibility around that? The final question is, if we assume that you take all the 46 and renew the charters on the existing ships, the 137, where do you think roughly the lease liability would max out at, please? Thank you. On the first question with respect to the Transpacific contract rate, yes, we did mention that, the re-fix order we agreed on average at rates that are more than double compared to compared to what we signed the same time last year. There is also some you know some latitude or some gap between the various rates that we've agreed. By and large, versus the spot today, we were or depending on when you are looking at the in terms of over the past few weeks, but the rates that we contracted were not that far from what the spot currently is today. With regard to your second question, the 46 vessels. We did indeed agree to pay a total to put upfront some cash at the time we will get the delivery of those vessels. It was actually not a request from the charterers or the sellers provided, but more a request from us to be able to put our cash to good use, as opposed to have to remunerate the equity of the manager owner that would otherwise demand a very strong remuneration of that equity. It was a way for us to reduce the daily charter rate that we would be paying over the duration of the chartering agreement. By and large, I think we did communicate for the first series of vessels that we've expanded, the 10,000-15,000 TEU vessels. We are talking about $13.13 million per vessel to $130 million all together for the 15 vessels. For the subsequent order of the 7,700 TEU vessels, 18 of them, we agreed for $20 million all together in terms of payment. If you add everything all together, the commitments in terms of cash out at the time we get the delivery of those new builds will be in the region of $500 million. To the last question, it's difficult to answer that one, Sam, because obviously we don't know what the chartering renewal rates will be or would be if we were to renew the charter in 2023 and 2024 as opposed to let go of the vessels that we currently operate to make room for the ones that would be delivered to us. For that, it's a bit difficult to say. Obviously, we would only do it if we felt that this was the right thing to do, from a business perspective. As you know, it is very high on our agenda to grow profitably and to enter into trades where we believe that we can generate ongoing and sustainable profit. We are very pleased to have the option to continue to grow, but in no way do we feel we have the obligation to continue to grow aggressively. Understood. Thank you very much. This concludes our Q&A session and the ZIM Q1 Earnings C all. all. Thank you for joining, and have a pleasant day.