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Filed Pursuant to Rule 424(b)(7)
Registration No. 333-231509

Prospectus Supplement

(To prospectus dated May 28, 2019)

4,500,000 Class A Common Shares

The selling shareholders identified in this prospectus are offering 4,500,000 Class A common shares of Global Ship Lease, Inc. The selling shareholders have granted the underwriters in this offering an option for a period of 30 days to purchase up to 675,000 additional Class A common shares on the same terms and conditions as set forth herein.

We will not receive any proceeds from the sale of our Class A common shares by the selling shareholders.

Our Class A common shares are listed on the New York Stock Exchange (the “NYSE”) under the symbol “GSL.” On April 7, 2021, the last reported sale price of our Class A common shares on the NYSE was $14.50.

An investment in our Class A common shares involves a high degree of risk. Before you make an investment in the Class A common shares, you should carefully consider the section entitled “Risk Factors” beginning on page S-16 of this prospectus supplement, and other risk factors contained in the documents incorporated by reference into this prospectus supplement and the accompanying base prospectus.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Class A common shares to purchasers on or about April 13, 2021.

Joint Book-Running Managers

The date of this prospectus supplement is April 9, 2021.

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Prospectus Supplement

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Base Prospectus

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ABOUT THIS PROSPECTUS

This prospectus supplement and the accompanying base prospectus are part of a registration statement that we filed with the U.S. Securities and Exchange Commission (the “Commission”) using a “shelf” registration process. This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of Class A common shares and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated by reference therein. The second part, the base prospectus, gives more general information about securities we or any selling shareholders may offer from time to time, some of which does not apply to this offering. Generally, when we refer only to the prospectus, we are referring to both parts combined, and when we refer to the accompanying prospectus, we are referring to the base prospectus.

If the description of this offering varies between this prospectus supplement and the accompanying base prospectus, you should rely on the information in this prospectus supplement. This prospectus supplement, the accompanying base prospectus and the documents incorporated into each by reference include important information about us, the selling shareholders, the Class A common shares being offered and other information you should know before investing. You should read this prospectus supplement and the accompanying base prospectus together with additional information described under the heading, “Where You Can Find Additional Information” before investing in our Class A common shares.

We have authorized only the information contained or incorporated by reference in this prospectus supplement, the accompanying base prospectus and any free writing prospectus prepared by us or on our behalf or to which we have referred you. We, the selling shareholders, and the underwriters have not authorized anyone to provide you with information that is different. We, the selling shareholders, and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. The selling shareholders are offering to sell, and seeking offers to buy, the Class A common shares only in jurisdictions where offers and sales are permitted. The information contained in or incorporated by reference in this prospectus supplement and accompanying base prospectus is accurate only as of the date such information was issued, regardless of the time of delivery of this prospectus supplement or any sale of the Class A common shares. Our business, financial condition and results of operations and prospects may have changed since those dates.

Unless the context otherwise requires, references to the “Company,” “we,” “us,” “our” or “Global Ship Lease” refer to Global Ship Lease, Inc., the “selling shareholders” refers to the selling shareholders named in this prospectus supplement under the caption “Selling Shareholders”, “CMA CGM” refers to CMA CGM S.A., currently a principal charterer and shareholder, “Poseidon Containers” refers to Poseidon Containers Holdings LLC and K&T Marine LLC, collectively, with whom we completed a strategic combination on November 15, 2018, Technomar Shipping Inc. (“Technomar”) refers to our ship technical manager (“Technical Manager”), ConChart Commercial Inc. (“Conchart”) refers to our commercial ship manager (“Commercial Manager”, and together with Technomar the “Managers”), and “MSI” refers to Maritime Strategies International Limited, our industry expert. Unless otherwise indicated, all references to “$” and “dollars” in this prospectus are to U.S. dollars. We use the term “TEU”, meaning twenty-foot equivalent unit, the international standard measure of container size, in describing volumes in world container trade and other measures, including the capacity of our containerships, which we also refer to as ships. Unless otherwise indicated, we calculate the average age of our ships on a weighted average basis, based on TEU capacity. References to our “2020 Annual Report” refer to our Annual Report on Form 20-F for the fiscal year ended December 31, 2020, that was filed with the Commission on March 19, 2021, which is incorporated herein by reference.

On November 15, 2018, we completed a transformative transaction and acquired Poseidon Containers’ 20 containerships, one of which, the Argos, was contracted to be sold, which sale was completed in December 2018, which we refer to herein as the “Poseidon Transaction”. References herein to the “GSL Fleet” are to the 19 ships that were owned by us prior to the consummation of the Poseidon Transaction, two of which have subsequently been sold.

On March 25, 2019, we effected a one-for-eight reverse stock split of our Class A common shares. All share and per share amounts disclosed in this prospectus have been retroactively adjusted to reflect the reverse stock split.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this prospectus include, but are not limited to, statements regarding our disclosure concerning our operations, cash flows, financial position, dividend policy, the anticipated benefits of strategic acquisitions, and the likelihood of success in acquiring additional vessels to expand our business.

Forward-looking statements appear in a number of places in this prospectus and in our 2020 Annual Report, as updated by annual, quarterly and other reports and documents we file with the Commission after the date of this prospectus and that are incorporated by reference herein, including, without limitation, in the sections entitled “Business Overview,” “Management’s Discussion and Analysis of Financial Conditions and Operations,” and “Dividend Policy.”

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in “Risk Factors” in this prospectus. The risks described under “Risk Factors” are not exhaustive. Other sections of this prospectus describe additional factors that could adversely affect our results of operations, financial condition, liquidity and the development of the industries in which we operate. New risks can emerge from time to time, and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statement to reflect circumstances or events after the date of this prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we will file from time to time with the Commission after the date of this prospectus.

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RISK FACTORS

An investment in our Class A common shares involves substantial risks. Before making an investment in our Class A common shares, you should carefully consider the risks described below, as well as the other information included in this prospectus supplement and the accompanying base prospectus, including those in “Item 3. Key Information—D. Risk Factors” in our 2020 Annual Report, filed with the Commission on March 19, 2021, as updated by annual, quarterly and other reports and documents that we file with the Commission after the date of this prospectus supplement that are incorporated by reference herein. Please see the section of this prospectus entitled “Where You Can Find Additional Information—Information Incorporated by Reference.” The occurrence of one or more of those risk factors could adversely impact our business, financial condition or results of operations and could affect the value of the Class A common shares being offered by this prospectus supplement.

Our financial and operating performance may be adversely affected by the global COVID-19 pandemic.

Since the beginning of calendar year 2020, the COVID-19 pandemic has resulted in the implementation of numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including, among others, business closures, quarantines, travel restrictions, and physical distancing requirements. These measures have resulted in a significant reduction in global economic activities and uncertainty in the global financial markets. When these measures and the resulting economic impact will end and the long-term impact of such measures on the global economy cannot be determined at this time. A significant reduction in manufacturing and other economic activities has and will continue to have a material and adverse impact on the global production and supply of goods, such as those that our customers transport on our vessels, which has and may continue to negatively affect the demand for container shipping services, and therefore charter rates and asset values. In addition, the COVID-19 pandemic has caused, and if it continues on a prolonged basis may continue to cause, delayed or extended drydockings and disruptions in our operations from non-availability of staff and materials. The scale and duration, as well as the impact, of these factors, while currently uncertain, could have a material and adverse impact on our operations, earnings, cash flows and financial condition.

While we cannot predict the long-term economic impact of the COVID-19 pandemic, we will continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by authorities in the jurisdictions where we operate. The ultimate effects that any such alterations or modifications may have on our business are not clear, including any potential negative effects on our business operations and financial results.

The price of our securities may be volatile.

The price of our Class A common shares may be volatile and may fluctuate due to factors such as:

The international container shipping industry has historically been highly unpredictable and volatile. The market for common shares in companies operating in the container shipping industry may be equally volatile.

Future sales of our Class A common shares could cause the market price of our Class A common shares to decline.

Sales of a substantial number of our Class A common shares in the public market, or the perception that these sales could occur, may depress the market price for our common shares. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future.

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Subject to the rules of the NYSE, in the future we may issue additional shares of common stock, and other equity securities of equal or senior rank, without shareholder approval, in a number of circumstances. The issuance by us of additional shares of common stock or other equity securities of equal or senior rank would have the following effects:

Our shareholders also may elect to sell large numbers of shares held by them from time to time. The number of shares of common stock available for sale in the public market will be limited by restrictions applicable under securities laws, and agreements that we and our executive officers, directors and existing shareholders may enter into with the underwriters at the time of an offering. Subject to certain exceptions, these agreements generally restrict us and our executive officers, directors and existing shareholders from directly or indirectly offering, selling, pledging, hedging or otherwise disposing of our equity securities or any security that is convertible into or exercisable or exchangeable for our equity securities and from engaging in certain other transactions relating to such securities for a period of up to 180 days after the date of an offering prospectus without the prior written consent of the underwriter(s).

Certain shareholders, including Kelso, a selling shareholder in this offering, may have the power to exert significant influence over us, and their interests could conflict with the interests of our other shareholders.

According to information available to us, including contained in public filings, Kelso owns approximately 35.7% of our Class A common shares through its ownership of 12,955,188 Class A common shares following the conversion of the 250,000 Series C Preferred Shares it held, on January 20, 2021. Immediately following the completion of this offering and assuming Kelso sells an aggregate of 4,166,667 Class A common shares in this offering, Kelso will beneficially own 8,788,521 Class A common shares, representing approximately 24.2% of our issued and outstanding Class A common shares, and assuming the underwriters exercise in full the option to purchase additional shares, Kelso will beneficially own 8,163,521 Class A common shares, representing approximately 22.5% of our issued and outstanding Class A common shares. In addition, a Managing Director of Kelso is a member of our Board of Directors. As a result, Kelso has the power to exert significant influence over our actions and the outcome of matters on which our shareholders are entitled to vote, including increasing or decreasing our authorized share capital, the election of directors, declaration of dividends, the appointment of management, and other policy decisions. In addition, according to information available to us, including public filings, CMA CGM owns approximately 8.4% of our Class common shares. Conflicts of interest may also arise between us and these significant shareholders or their affiliates, which may result in transactions on terms not determined by market forces. Any such conflicts of interest could adversely affect our business, financial condition and results of operations, and the trading price of our common shares. Moreover, the concentration of ownership may delay, deter or prevent acts that may be favored by or favorable to our other shareholders or deprive shareholders of an opportunity to receive a premium for their shares as part of a sale of our business. Similarly, this concentration of share ownership may adversely affect the trading price of our shares because investors may perceive disadvantages in owning shares in a company with concentrated ownership.

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USE OF PROCEEDS

All of our Class A common shares offered hereby are being sold by the selling shareholders. The selling shareholders will receive all of the net proceeds from the sale of shares of our Class A common shares they are offering pursuant to this prospectus supplement and the accompanying prospectus. We will not receive any proceeds from the sale of Class A common shares. Because we will not be selling any shares in this offering, the offering will not result in any dilution of equity ownership to existing holders of Class A common shares.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2020, on an:

You should read the information below together with the sections of this prospectus supplement and accompanying base prospectus entitled “Use of Proceeds” and “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 2020 Annual Report, as well as the financial statements and related notes which are incorporated by reference into this prospectus.

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There have been no other material adjustments to our capitalization since December 31, 2020, as so adjusted.

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SELLING SHAREHOLDERS

Based solely upon information furnished to us, the following table sets forth certain information about the selling shareholders in this offering, Kelso and Maas, as of April 7, 2021. Beneficial ownership is determined in accordance with the rules of the Commission, and includes voting or investment power with respect to shares. Generally, a person “beneficially owns” shares of our common stock if the person has or shares with others the right to vote those shares or to dispose of them, or if the person has the right to acquire voting or disposition rights within 60 days.

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THE INTERNATIONAL CONTAINER SHIPPING AND CONTAINERSHIP LEASING INDUSTRY

Maritime Strategies International Ltd. (“MSI”) has provided the statistical and graphical information in this section. MSI has advised that (i) some information in MSI’s database is derived from estimates derived from industry sources or subjective judgments, (ii) the information in the databases of other maritime data collection agencies may differ from the information in MSI’s database, (iii) whilst MSI has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures and may accordingly contain errors, (iv) MSI, its agents, officers and employees cannot accept liability for any loss suffered in consequence of reliance on such information or in any other manner, and (v) the provision of such information does not obviate any need to make appropriate further enquiries.

Industry Overview

Container shipping is the most convenient and cost-effective way to transport a wide range of cargoes, predominantly a diverse selection of consumer, manufactured, semi-manufactured, and perishable goods. It is estimated that around 90% of non-bulk cargoes traded by sea are carried by containership. Global containerized cargo volumes have grown every year since the industry’s inception in 1956, with two exceptions: 2009, during the Global Financial Crisis, and 2020, due to the impact of COVID-19. However, the industry has displayed remarkable resilience during the COVID-19 crisis: after contracting significantly in the second quarter of 2020, leaving global containerized volumes 6.6% lower for first half 2020 v. the same period of 2019, cargo volumes recovered strongly during the second half of the year. Overall, negative growth of 1.9% is estimated for 2020—with a rebound of 6.9% anticipated in 2021. Approximately 204 million TEU, equating to around 1.8 billion tonnes, of containerized cargo are estimated to have been carried in 2020.

Global GDP and Container Trade Growth 2000-2021F

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Containerization is a low-carbon form of transportation, with Green House Gas (GHG) emissions per ton-mile of cargo carried significantly lower than that for other common modes of freight transport such as air, road, and rail. As a key component of global supply chains, container shipping is also a contributor to the UN’s Sustainable Development Goals—particularly those associated with poverty alleviation, economic growth, and infrastructure. The International Maritime Organization (IMO) has set targets for the reduction of Greenhouse Gas emissions from shipping of at least 50% compared to 2008 levels by 2050.

CO2 Emissions by Transport Mode, Range of gr CO2 /Tonnes-km Emitted

The containerized supply chain extends throughout the world. Mainlane trades are those linking the major manufacturing economies in Asia with the major consumer economies in North America (the Transpacific trades) and Europe (the Asia-Europe trades), and those linking Europe with the Americas (the Transatlantic trades). These trades tend to be served by the largest containerships on the water. However, in 2019, a more representative (i.e., pre-COVID) year compared to 2020, 71% of global containerized volumes were on the non-Mainlane trades, with intra-regional trades—of which the largest is Intra-Asia—representing almost 40%. These non-Mainlane and intra-regional trades are predominantly served by mid-sized and smaller containerships (10,000 TEU, or smaller).

Growth in containerized trade is linked to consumer-led demand for goods and thereby to regional economic growth. Historically, underlying growth was boosted by both the containerization of breakbulk goods, including refrigerated cargoes, and the relocation of manufacturing from developed economies such as those in Europe and North America, to lower cost regions, most notably in Asia. Of these, the continued containerization of refrigerated (or ‘reefer’) cargoes is expected to continue to outpace overall container trade growth.

Within the container shipping industry, key participants include shippers, liner shipping companies and containership owners:

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In the containership charter market, leases are most often structured as time charters. Under a time charter, the operating costs of the ship, including crew costs—but with the important exception of fuel costs, which are paid for by the charterer or lessee—are borne by the lessor or containership owner. Charter periods can vary in length: the short term, or spot, market generally refers to charter fixtures of 12 months or less, while longer term charters refer to multi-year fixtures, with charters of five years or more not uncommon.

Earnings within the industry, both for liner shipping companies in the form of freight rates and for containership owners in the form of time charter rates, tend to be driven by supply and demand fundamentals.

Demand

Global container trade predominantly involves the movement of manufactured and semi-manufactured goods. Growth drivers include the increasing consumption of manufactured goods, the containerization of goods formerly transported by other vessel types (above all refrigerated cargoes), and the offshoring of manufacturing and extension of global supply chains. Historically, there has tended to be a strong correlation between the growth of containerized trade growth and the growth of global Gross Domestic Product (“GDP”).

From 2000 through 2008, a period of super-cyclical growth largely catalyzed by China, the Compound Annual Growth Rate (CAGR) of global containerized trade was 9.9%. Having contracted by 8.0% in 2009, during the Global Financial Crisis, growth rebounded by 15.3% the following year. The CAGR from 2010 through 2019 was 3.8%. In 2020, during the COVID-19 crisis, global containerized trade volumes contracted sharply in the first half of the year, falling approximately 6.7% on the same period in 2019. However, volumes began to rebound in the second half of the year, making up some of the lost ground and resulting in estimated negative growth of approximately 1.9% for the full year. Analyst consensus for this volume recovery involves a combination of changing consumption habits (consumers purchasing “things” rather than “experiences” during COVID lock-downs), re-stocking, and making supply chains more robust (moving from “just in time” to “just in case” inventory management). Although heavily caveated, growth in 2021 is currently forecast at 6.9%.

Monthly Headhaul Container Trade Compared to Previous Year by

Trade Grouping, January 2020 through January 2021

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Traditionally, global container trade has been separated into four different trade groupings: the arterial East-West Trades (“Mainlanes”), the non-Mainlane East-West trades, North-South trades and intra-regional trades. Approximately 71% of global containerized trade volumes are carried in the non-Mainlane trades, which also tend to be the faster growing trades.

Composition of Global Containerized Trade in 2019 (a Representative, pre-COVID Year)

The Mainlane trades are the major East-West routes connecting Asia, North America and Europe: the Asia-Europe, Transpacific and Transatlantic trades. Of these, the Transpacific (commonly taken to refer to all cargoes moved between Asia and North America, regardless of whether they cross the Pacific or go via the Suez Canal) and Asia-Europe are the largest.

Cargoes on the Asia-Europe and, to some degree, on the Transpacific trades tend to be carried on the largest vessels (over 10,000 TEU) since the length and high cargo volumes of these trades, combined with well-developed port infrastructure, allow such vessels to maximize their economies of scale. Asia-Europe services across the industry deploy the fleet’s largest vessels, trending towards 18,000 TEU or larger, with an average ship size of 16,722 TEU. Excluding the bottom and top decile of vessels by nominal TEU capacity, vessels deployed on Asia-Europe services trades range in size from 11,040 to 21,413 TEU. On Transpacific services the average ship size is 8,890 TEU. Excluding the bottom and top decile of vessels by nominal TEU capacity, vessels deployed on Transpacific services trades range in size from 4,360 to 13,800 TEU.

The non-Mainlane East-West trades are those which link the Middle East and Indian Subcontinent to Asia, Europe and North America. Of these, the most significant is the Westbound Asia-Middle East/Indian Subcontinent trade, which in 2019 represented just over 4% of global volumes. While historically these trades have been served by smaller vessels than those deployed on the Mainlane trades, the combination of relatively high cargo volumes and port infrastructure development has resulted in the deployment of vessels of 10,000 TEU or larger on some service loops (with vessels on one current service reaching 21,237 TEU). The average vessel size on non-Mainlane East-West trades is 6,517 TEU. Excluding the bottom and top decile of vessels by nominal TEU capacity, vessels deployed on non-Mainlane East-West trades range in size from 1,708 to 13,092 TEU.

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North-South trades are those which connect North America, Europe and Asia with Central and South America, Sub-Saharan Africa and Oceania—the largest of which is the Asia-Latin America trade. Vessels serving these trades span the range of large feeders (around 2,700 TEU), up to 13,500 TEU vessels on selected Far East to West Africa trades. Average vessel size is 5,293 TEU. Excluding the bottom and top decile of vessels by nominal TEU capacity, vessels deployed on North-South trades range in size from 1,732 to 9,411 TEU.

Intra-regional trades are the largest trade grouping and include the intra-Asian, intra-European and intra-Latin America and Caribbean trades. Of these, the largest is the intra-Asian trade, representing approximately one third of global containerized volumes. Each intra-regional trade is made up of many different sub-trades, which may have very different characteristics. Consequently, intra-regional trades are served by a wide range of vessels, ranging from containerships under 1,000 TEU up to vessels in excess of 5,000 TEU. However, for a majority of the intra-regional sub-trades either low freight volumes, short distances or port restrictions make them most suited to smaller vessels; in some cases only smaller vessels equipped with gear—i.e. those with their own cranes to load and unload containers—are viable. On intra-regional trades the average vessel size is 1,773 TEU. Excluding the bottom and top decile of vessels by nominal TEU capacity, vessels deployed on intra-regional trades range in size from 584 to 4,043 TEU.

Annual Container Trade Growth by Trade Grouping, Including 2020 and 2021 Forecasts

Global container trade is broad-based in nature, with limited exposure to any single trade-lane. This is significant in the context of the US-China trade conflict which began in 2018. The Transpacific trades represent 13.1% of overall volumes, while trade between China and the US (and vice-versa) represents 6.3% of global containerized volumes. Furthermore, a consequence of the trade conflict has been the increased market share of non-Chinese manufacturers on the Asia-US trade via a process of cargo substitution. During 2019, US containerized imports from ASEAN countries plus Japan, South Korea, and Taiwan grew by an aggregate of 17.1% (equal to an increase of 0.84 million TEU), while imports from China and Hong Kong shrank by -9.8% (equal to a decrease of 1.17 million TEU). In 2020, despite the impact of COVID-19 earlier in the year, US containerized imports from ASEAN countries grew by 16.1%, while imports from China and Hong Kong grew by 1.8%.

Containerized trade volumes tend to fluctuate seasonally, with the second and third quarters typically marking the high season and the first and fourth quarters the low. Due to COVID-19, that seasonality has been distorted in 2020—with the third and fourth quarters showing strongest growth.

Supply

As at December 31, 2020, 5,319 containerships with a nominal capacity totaling 23.6 million TEU were on the water. A further 2.5 million TEU were on order, for delivery through 2024. By February 28, 2021, the fleet had grown to 23.7 million TEU and the orderbook stood at 3.5 million TEU. ‘Nominal capacity’ refers to the maximum number of 20-foot containers that a vessel can carry, without regard to weight restrictions. A more realistic measure of the cargo carrying capacity of a containership is its homogenous intake at 14 mt per TEU.

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Containerships range in size from under 500 TEU to over 23,000 TEU. There is considerable overlap in trading patterns for each size segment of the containership fleet and these patterns have evolved, and continue to evolve, over time. Since 2008, the tonnage cascade—which refers to the process of the deployment of larger vessels which displace smaller vessels which, in turn, displace even smaller vessels onto other tradelanes—has accelerated due to the top-heavy orderbook and comparatively weaker recent volume growth on the Mainlanes. As at December 31, 2020, 77% of capacity over 10,000 TEU, was deployed on Mainlane trades. However, mid-sized and smaller tonnage remains core to global container shipping networks, especially on the non-Mainlane and large intra-regional trades such as intra-Asia.

Containership Fleet Composition by # of Vessels, December 31, 2020

Containership Deployment by Trade, as at December 31, 2020

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Deployment for the 5,100-7,499 TEU and 4,000-5,099 TEU fleet segments is split more evenly: for vessels in the 5,100-7,499 TEU segment the Mainlanes provide 25.3% of employment, non-Mainlane East-West and North-South trades combined a further 59.9%, and longer-haul regional routes the remaining 14.8%; for vessels in the 4,000-5,099 TEU ‘classic’ Panamax segment, Mainlane trades provide 20.4% of employment, non-Mainlane East-West trades 8.6%, North-South trades 29.5%, and regional and South-South routes the remaining 41.5%. Significant numbers of ‘classic’ Panamax vessels have been re-deployed to what were traditionally ‘feeder’ trades in recent years.

Non-Mainlane East-West and North-South trades provide employment to 47.8% of the 3,000-3,999 TEU fleet segment, with most of the remainder employed on regional routes. Vessels below 3,000 TEU (“feeder vessels”) are most commonly employed on intra-regional trades, which account for 79.5% of feeder deployment; North-South trades account for an additional 11.3%, with the remainder split between South-South, non-Mainlane East-West and specialist Mainlane routes.

Generally speaking, deployment on Mainlane trades is not limited by ‘hard’ physical size restrictions. This certainly applies to the major European, Middle Eastern and Far East ports, which can accommodate the largest vessels in the fleet. Whilst in theory some North American ports can also accommodate 18,000+ TEU vessels, liner companies have been reluctant to deploy these larger vessels in North America to date.

Deployment on non-Mainlane trades is more often subject to physical constraints, such as shallow draft, length restrictions, and limited shore-side infrastructure. Factors such as these can be compounded by liner companies’ desire not to tie up their larger, strategic vessels in congested or otherwise inefficient ports. In emerging markets, under-developed shore-side infrastructure can also create a requirement for geared vessels with their own cranes to load and unload cargo. As at December 31, 2020, 9.1% of the global fleet (by TEU capacity) was geared, while geared tonnage represented only 2.7% of the industry-wide orderbook. The simple average age of the geared fleet across the industry was 15.8 years.

In addition to infrastructure considerations, some key restrictions to introducing larger vessels onto many regional services are commercial. Due to short voyage distances, frequent port calls and lower volumes, it can be challenging to both maintain a high-frequency service and keep vessel utilization at a profitable level when larger vessels are introduced. This difficulty is compounded when a route is served by many independent operators. On regional trades, the liner operator landscape remains highly fragmented.

Growth of the containership fleet has been driven by anticipated growth in containerized trade, together with up-sizing of vessels to achieve economies of scale. Between the start of 2000 and end of 2008, the nominal carrying capacity of the industry-wide fully cellular fleet grew by a compound annual rate of 11.7%; and from the start of 2009 through to the end of 2019 at 6.0%. On December 31, 2020, the fleet was 3.1% larger than at the end of 2019. Based on the existing orderbook, fleet growth is expected to be 2.9% in 2021, and 1.6% in 2022.

The orderbook-to-fleet ratio is a key indicator of the pace of fleet growth in future years. For containerships this measure peaked at over 60.0% in 2007. As at December 31, 2020 it was 9.9%: the lowest year-end ratio seen for over 40 years. This is for a combination of reasons: improved discipline due to mega-alliances formed by the liner shipping companies to coordinate capacity management (collectively, the three biggest alliances control around 85% of operated capacity as at December 31, 2020), constrained access to capital limiting speculative ordering activity, shipyard consolidation improving pricing discipline, and, more recently, significant uncertainty over the fuel and propulsion technologies required to support the industry’s de-carbonization objectives going forward.

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Evolution of Global Fleet & Orderbook-to-Fleet Ratio, 2007—December 31, 2020

In recent months, ordering activity has increased. However, it has tended to follow a “bar-bell” distribution, with contracting concentrated in the small size segments and the large size segments—with limited activity in the mid-sizes. As at February 28, 2021, the industry’s orderbook stood at 3.5 Million TEU, with an overall orderbook-to-fleet ratio of 14.6%. The ratio for sub-10,000 TEU containerships was 2.7%, and that for 2,000—9,999 TEU ships was 2.1%. For mid-size Post-Panamax ships (5,500—9,999 TEU) the ratio stood at 0.2%.

Orderbook by Size Segment as at February 28, 2021

Containership newbuildings are either contracted by liner companies intending to operate the vessels, or by independent charter-owners planning to charter them to liner operators. Charter-owners either order vessels with pre-arranged term charters to a liner company—often referred to as a “back-to-back” arrangement—or on a speculative basis, hoping to fix the vessel on the open market once it is delivered.

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The sector has been capital-constrained since 2008. This is a product of the retrenchment of shipping banks (particularly those based in Europe) and the decline of the German KG environment (which is covered in the “Containership Leasing” section). While alternative capital providers, including private equity and Chinese leasing companies, have increased their activity within the sector, financial distress and a generally more stringent regulatory environment for the major shipping banks have restricted the funding available to the industry.

Consequently, since the global financial crisis, the ordering of new containerships has been by the liner companies themselves and by the relatively few charter-owners with access to capital. In recent years, speculative ordering has been rare, with most newbuilding commitments made by charter-owners made back-to-back with long-term charters to established liner operators. Chinese leasing companies have been increasingly active as a source of financing for top tier liner companies—largely as a substitute for conventional senior lending that would historically have been provided by European shipping banks. This has tended to skew ordering (and net fleet growth) towards larger “strategic” ships, while the ordering of mid-size and smaller ship segments has been much more limited.

In the meantime, global shipyard capacity has seen consolidation and reduction since the Global Financial Crisis, with the number of active shipyards globally at the end of 2019 down by approximately 73% since the 2007 peak. While we have yet to complete our collection of reliable data for 2020, we believe that the trend has continued. This process of consolidation is expected to increase the pricing discipline of shipyards, potentially adding upward pressure to newbuild vessel prices.

Number of Active Shipyards by Region, 2007—2019

As the industry addresses the need to de-carbonize, it will be obliged to migrate to new green fuels and propulsion technologies over the coming decades. Considerable work is being done by industry organizations to progress these goals, with particular focus on hydrogen and ammonia. However, it is likely to be a number of years before new green fuel and propulsion technologies are established and widely available for commercial adoption. Given that container ships are long-lived assets, uncertainty regarding future technologies is serving as an inhibitor to new ordering activity. Speculative ordering is currently extremely limited. Instead, contracting is “needs-driven” and involves either the liner operators contracting newbuildings themselves, or containership owners contracting ships against long-term charter commitments from lines.

Marginal containership capacity—largely fuel-inefficient or poorly maintained ships—has been removed over time via ship recycling. Although the major ship recycling facilities in the Indian Subcontinent were forced to close during the worst of the COVID-19 crisis, they have since-opened. A total of 194,600 TEU of capacity were scrapped during 2020, v. 190,000 TEU scrapped during 2019. Despite scrap prices rebounding to ~$450 per LWT in the first two months of 2021, recycling of containerships has slowed almost to a standstill due to ever-strengthening earnings in

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the charter market. As at February 28, 2021, only four containerships, with an average age of 29 years, had been scrapped in 2021.

Historical Scrapping Volumes, through February 28, 2021

The combination of scrapping out existing capacity and the limited ordering of newbuildings has resulted in negligible, and even negative, net fleet growth in the mid-size and smaller ship segments in recent years.

Containership Net Fleet Growth by Size Segment, 2016 through February 28, 2021

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Variations in idle capacity provide an insight into the balance between supply and demand at any given time. As at December 31, 2020, containership idle capacity stood at 1.2%—down from close to 12% when the impact of COVID-19 was most significant, and down from 5.8% at the end of 2019 (a more representative, pre-COVID year). As at February 28, 2021, idle capacity stood at 1.3%. As there is always some latent capacity in the system, and adjusted for seasonality, for all practical purposes this is equivalent to full utilization.

Evolution of the Idle Fleet, through February 28, 2021

It is notable that, during the first 8 months of 2020, when idle capacity was spiking, on average 69% of idle capacity was owned by the liner operators themselves. This is in contrast to most historic market downturns and was a product of strong capacity management discipline by the lines, involving the “blanking” of weekly sailings (ie. temporary removal of capacity) in order to maintain supply / demand balance on individual trade lanes. Another notable phenomenon was the “reverse cascade”, with lines down-sizing ships in order to maintain capacity-tension and support freight rates. The results were positive for liner company financial performance, as reflected by large global operators like Maersk Line and CMA CGM which generated increased EBITDA in 2Q20 v. 2Q19 of 26.0% and 26.3% respectively, despite lower cargo volumes. For full year 2020 Maersk Line EBITDA was up by 47.5% on 2019, while CMA CGM (liner division) EBITDA was up by 71.1%.

Containership Age Profile and Quality by Size Segment

The global containership fleet spans a range of ship sizes. Within each size segment, ships vary by age, specification, and quality.

The weighting of the orderbook towards larger vessels, and comparative under-investment in mid-sized and smaller ships, mean that, on average, ships in the smaller size segments of the containership fleet are significantly older than those in the larger size segments. As at December 31, 2020, approximately 70% of the fleet under 2,000 TEU by nominal capacity is more than ten years old and 21% is at least 20 years old. The age profile of the small containership fleet is expected to become ‘older’ in the near future. In contrast, no vessel over 10,000 TEU is more than 15 years old.

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Age Profile of Containership Fleet by Size Segment, as at December 31, 2020

An important differentiator is a ship’s refrigerated cargo carrying capacity. This is a function of the number of “reefer” plugs aboard (each refrigerated container must be plugged into the ship’s power supply) and the ship’s installed power generation capacity. As growth in the transport of refrigerated cargoes continues to outpace wider containerized trade growth, liner companies have an incentive to maximise the volume of lucrative reefer cargoes they can carry. This is especially the case on Latin America trade routes. The chart below shows the average number of reefer plugs by vessel size band, alongside the bottom quartile average and the vessel with the highest number of reefer points in each size band. There is clear differentiation between vessels with the highest reefer capacity and the average vessel in each size band.

Reefer Plugs per Vessel of Containership Fleet by Size Segment, as at December 31, 2020

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The weighting of the orderbook towards larger vessels over the last few years also implies that the near-term impact of the new generation of fuel-efficient “eco-ships”—referring to new designs of vessels which are configured to offer reduced fuel consumption and are optimized to operate at lower speeds—may be more pronounced in the larger size segments and under-represented in the mid-sized and smaller vessel segments. Furthermore, the contracting of such tonnage by liner companies or, on a back-to-back basis, by charter-owners implies that such vessels are unlikely to be a significant component of the spot charter market for some time. Consequently, it is expected that those eco-ships that do appear on the spot charter market will earn a premium but will be unlikely to more generally define vessel earnings until they account for a significantly larger proportion of the market.

“Eco” Design Share of Fleet by Sub-segment, as at December 31, 2020

Slot Costs

A fundamental aspect of containership markets is that the relationship between vessel carrying capacity and daily fuel and operating costs is non-linear. This is usually expressed in terms of a vessel’s slot cost, which is the daily cost to a liner company of each loaded container on a ship, assuming the vessel is full.

Ships with identical ‘nominal’ TEU capacities can in practice have different ‘effective’ TEU capacities (calculated on the basis of homogenous loads of 14 mt / TEU) since, all else being equal, relatively ‘wide’ vessels exhibit superior stability and so are able to carry a larger number of laden containers than ‘narrower’ vessels. For this reason, ‘widebeam’ (including Post-Panamax) containerships tend to command a premium in terms of time charter rates versus their narrower beam (Panamax and smaller) peers. Similarly, in response to the high fuel price environment in 2013-14 shipyards began to produce more modern ‘Eco’ design containerships, with improved design and more fuel-efficient engines. As ‘Eco’ ships can offer substantial fuel savings relative to ‘Pre-Eco’ vessels of a similar size, they also tend to command both higher time charter earnings and resale values.

Slot costs can be calculated using the following formula, where the cargo-carrying capacity of a vessel is defined as the maximum number of 20 ft containers weighing 14 tons that a ship is able to carry (as opposed to its nominal TEU capacity).

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The greater the cargo-carrying capacity and fuel-efficiency of a ship, the lower the slot cost. The lower the slot cost, the more attractive a vessel is to liner companies in the charter market. Fuel efficiency is a function of both the size of the vessel and of the design features of an individual vessel. The chart below shows how the relationship between per-slot fuel costs and overall carrying capacity changes as vessel size increases. As vessel size increases, fuel consumption per slot, emissions per slot, and costs per slot all decrease.

Illustrative Daily Fuel Cost per TEU Slot, by Ship Size, with Fuel at $400 / MT

As shown in the slot cost calculation formula, vessel costs are a function of fuel costs and charter hire. For vessels of different sizes the fuel cost component can be calculated using assumptions about the speed at which vessels are operated (assumed to be 18 knots), the fuel consumption of vessels of different sizes at the assumed operating speed (measured in mt/day), the average time that vessels of different sizes spend at sea, and the price of fuel in $/mt. For a theoretical vessel of 4,250 TEU this daily fuel cost amounts to around $18,362 per day burning LSFO bunker fuel at an assumed cost of $400/mt.

As a hypothetical exercise, if it is assumed that the charter hire of a theoretical 4,250 TEU vessel is $24,000 per day, then the vessel’s total costs, including fuel, amount to around $42,362 per day. Assuming that the vessel can carry around 2,800 20 ft containers weighing 14 mt, this produces a daily slot cost of $15.10 per slot.

Slot cost parity is an exercise that explores how time charter rates are affected if daily slot costs across vessels of different sizes are assumed to be equal. For each theoretical vessel, total daily costs are calculated by multiplying the vessel’s carrying capacity by the assumed ‘parity’ daily slot cost (in this exercise $15.10 per slot). If the calculated daily fuel cost for each theoretical vessel (using the methodology described above) is subtracted from this theoretical total cost, the remaining amount is the theoretical charter hire component for each vessel. Put another way, for each vessel this daily time charter rate is the rate that would imply overall slot cost parity with a 4,250 TEU vessel with a daily charter hire of $24,000 per day.

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The chart below compares this ‘implied’ slot cost parity time charter rate across different vessel sizes. The economies of scale associated with slot costs explain the greater relative time charter ‘upside’ commanded by larger vessels.

Daily Time Charter Rate by Vessel Size Implying Overall Slot Cost Parity with 4,250 TEU Panamax

It must be noted, however, that the potential economies associated with deploying larger vessels can only be unlocked if the utilization levels on those vessels (the percentage of available capacity actually occupied), market share and service frequency on a particular route) are high. Other factors include voyage length (larger vessels tend to be most cost-efficient on longer trades) and physical constraints (ports need to be sufficiently deep, with appropriate berth length, and equipped with sufficient shore-side infrastructure to handle larger vessels). With these limitations in mind, liner companies look for the lowest possible slot cost on any possible trade, and size vessels accordingly—taking into account total available cargo volume, anticipated market share, and service frequency.

De-Carbonization

The International Maritime Organization (IMO) has set targets for the reduction of Greenhouse Gas (GHG) emissions from shipping. The key agreed target is to reduce annual GHG emissions from the shipping industry by at least 50% by 2050, compared to benchmark 2008 levels. Further targets have also been set on carbon intensity; specifically, a reduction in CO₂ emissions “per transport work” by at least 40% by 2030, with efforts towards 70% by 2050.

Some liner companies, such as CMA CGM, are adopting Liquified Natural Gas, or LNG, as a transition fuel towards the next generation of genuinely green fuels. Others, such as Maersk, have expressed skepticism about LNG as part of a de-carbonization strategy given that it is still a hydrocarbon. Instead, they intend to wait until net-zero emission fuels are commercially available. The current consensus view is that 2030 will be the earliest inflection point at which next-generation green fuels (with the considerable infrastructure required to support them) will become commercially available, allowing industry adoption to begin to accelerate. In the interim, it expected that the industry will continue to rely predominantly on existing, conventionally fueled containerships that are optimized for lower emissions.

For conventionally fueled containerships, there is considerable variation in vessel emissions per tonne of cargo carried, with the economies of scale yielded by larger vessels typically resulting in lower emissions per container carried. Other factors, such as vessel age and design, fuel saving and energy efficiency retrofits, sailing speed, time in port, weather routing and other operational differences, can also have a significant impact on the relative fuel efficiency of different classes of containership. Logically, there is a strong correlation between ships with low fuel costs per TEU “slot” and ships with low emissions per TEU slot. The chart below shows the estimated fuel consumption per unit of cargo carrying capacity for different size classes of containership. As it shows, there is a significant increase in efficiency in the transition from small feeder containerships to intermediate-sized vessels.

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Whilst even larger vessels above 12,000 TEU offer further efficiencies relative to intermediate vessels, the incremental improvement curve tends to flatten as vessel sizes increase beyond that point.

Emissions by Containership Size

While the emissions profile of a ship during its operating lifetime is comparatively well understood, insufficient work has been done on a full life-cycle basis: quantifying the material carbon footprints associated with building a new ship, and subsequently de-commissioning and re-cycling it at the end of its economic life.

Liner Sector

Liner shipping companies are logistics service providers responsible for the seaborne, and often also inland, transportation of containerized goods.

Freight rates are paid by shippers to liner companies, and are generally measured on a $/TEU basis. Freight rate indices demonstrate the strength and resilience of earnings within the liner sector despite the challenges of COVID-19. Two widely used measures of freight rate performance are the China Containerized Freight Index (CCFI) and the Shanghai Containerized Freight Index (SCFI), which measure container freight rate trends across a number of Chinese export trades. As at December 31, 2020, the China Containerized Freight Index was up 89% year-on-year, while the Shanghai Containerized Freight Index was up 190%—with freight rates on the Transpacific at 10 year highs. As at February 28, 2021, these indices were up year-on-year by 127% and 227%, respectively.

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Evolution of Container Freight Rate Indices, 2019 through February 28, 2021

An important development in the sector over the last few years has been a wave of consolidation between liner operators.

Significant recent mergers include: Hapag-Lloyd and CSAV in 2014; Hamburg Süd and CCNI in 2015; COSCON and CSCL (both Chinese state-owned carriers), to form COSCO Shipping, in 2016; CMA CGM and APL in 2016; Hapag-Lloyd and UASC in 2017; Maersk Line and Hamburg Süd in 2017; COSCO Shipping and OOCL in 2018; and the three major Japanese operators—MOL, NYK Line and K Line—to form Ocean Network Express (ONE) in 2018. This process of consolidation has reduced the number of global operators to nine (from 20, in 2016).

On the Mainlane trades the principal carriers operate in alliances, through which liners combine to operate joint services under vessel sharing arrangements. This allows for a more efficient service network, the offering of a greater range of direct port pairs, and more targeted management of capacity. Effective capacity management, made easier by the existence of alliances, allowed liner companies to balance demand and supply during the worst impact of COVID-19 in 2020, thereby preventing a fall in freight rates. During previous episodes of weak demand, more constrained ability to adjust supply through reduced capacity often led to weak freight rates and extensive loss-making on the part of liner companies.

As of December 31, 2020, there were three alliances operating on the Mainlane trades: the 2M Alliance, the OCEAN Alliance and THE Alliance. Other major liner companies (such as ZIM) may cooperate with an alliance on a trade-by-trade basis. Formal alliances do not operate outside of the Mainlane trades, although non-Mainlane trades do see other forms of cooperation between liner companies.

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Liner Company Alliance Members as at December 31, 2020

As shown in the chart below, each of the alliances—which comprise nine companies in total—control a larger volume of operating capacity than the aggregate of the remaining 91 out of the top 100 operators (on the basis of the current fleet and orderbook).

Operating Capacity (Existing and On-Order as at December 31, 2020)

of the Liner Company Alliances

Containership Leasing

Fully cellular fleet ownership is split between liner companies and charter-owners. Liner companies have increasingly disaggregated vessel operation from vessel ownership. In a highly capital-intensive industry, chartering vessels allows liner companies to outsource their capital requirements while also giving them a platform to flex operating capacity up and down in line with fluctuations in demand. As at December 31, 2020, 56.9% of containership capacity deployed by the top 25 liners was chartered in from containership lessors. 55.5% of the total capacity operated by all liner companies was chartered in. 12.4% of overall capacity is provided by the top five charter-owners, and 36.3% by the top 30. In 1995 it is estimated that only 16.0% of the liner fleet was chartered in.

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Ownership of Containership Fleet Capacity, December 31, 2020

The chart below shows the fleet and orderbook of the top 25 liner companies, as well as highlighting the percentage of their deployed capacity which is chartered in.

Fleet Profiles of the Top 25 Liner Companies, December 31, 2020

Charter-owners are represented throughout the containership fleet. However, they are particularly prominent in the market for mid-size and smaller vessels, controlling 58.1% of the fleet capacity below 10,000 TEU. Overall, the charter-owner fleet totaled over 13.1 million TEU as at December 31, 2020, of which nearly 8.6 million TEU was composed of vessels under 10,000 TEU.

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The Charter-owner Fleet by Vessel Size Segment, December 31, 2020

Historically, the German KG system was the principal source of funding for many German shipowners, allowing them to become leading providers of chartered containership tonnage.

A KG is a closed end fund construct broadly analogous to a limited partnership. It has been employed as an investment vehicle for high net worth individuals (primarily German) in various asset classes, including shipping assets. In addition to the returns from their investments, investors in ship-oriented KGs also gain various tax benefits; although since 2005 these tax benefits have been reduced.

However, since 2008 the KG environment for ship investments has been significantly constrained, with limited new capital raised. The resulting retrenchment of German owners—traditionally the providers of mid-sized and smaller tactical tonnage to the sector—has had a significant impact.

The top charter-owners are now far more mixed. However, both in terms of volume and as a percentage of the overall orderbook, the aggregate charter-owner orderbook is low by historic standards. As at December 31, 2007 charter-owners accounted for nearly 53% of the outstanding industry-wide orderbook; as at December 31, 2020 the proportion stood at 44.3%.

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Fleet Profiles of the Top 30 Charter-Owners, December 31 2020

Contractual Dynamics and Economics of the Containership Leasing (Charter) Market

Liner companies charter vessels in from independent charter-owners. Charters can either be on a time charter or a bareboat basis.

Under a time charter, with the exception of fuel, which is paid for by the lessee, the operating costs of the vessel—including crewing and provisioning, maintenance and repair, lubricating oils and insurances—are borne by the lessor. The lessor must also cover capital expenditure associated with maintaining the vessel, including that for periodic drydocking. Time charters are broadly analogous to wet leases in the airline industry.

Under a bareboat charter, all operating expenses (including fuel) are borne by the lessee. The lessee must also typically cover required capital expenditure on the vessel during the lifetime of the lease. Bareboat charters are effectively financing transactions.

Shipping industry bodies, such as BIMCO (the “Baltic and International Maritime Council”), have developed standard contractual forms as the bases for time charter and bareboat charter agreements. These forms have been widely adopted by the industry.

Time charters tend to be more common than bareboat charters in the containership charter market.

Charter periods can vary in length. The spot market generally refers to charters of 12 months or less. Term charters cover longer fixtures: periods of five years or more are not uncommon. Charters of over seven years tend to be more akin to a financing arrangement than tactical access to tonnage. Charter contracts with international liner operators tend to be denominated in U.S. dollars.

The containership charter market has evolved with the containership fleet, with a liquid charter market only developing for a given vessel size segment once the fleet of vessels on the charter market for that segment reaches a critical mass. This can be driven by charter-owners making speculative orders for the charter market (currently rare), liner companies selling vessels to charter-owners (either outright, or with a charter back), and from ships entering the charter market on expiry of their initial “financing” charters. Consequently, the charter market for the smaller sizes of containerships has a longer pedigree than for larger vessels. Today, there is a liquid charter market for vessels up to around 10,000 TEU. Although there are larger ships on the charter market, transaction volumes are currently limited.

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The volume of containership charter fixtures varies according to the demand for ships and the average length of charter. Charter length tends to shorten in weak markets and lengthen in strong markets—or when forward sentiment is strong. During the second half of 2020, charter periods have been lengthening.

Reported Annual Containership Fixture Activity,

through December 31, 2020

Average Length of Containership Fixtures, sub-8,500 TEU Vessels, 1990—2020

In the spot, or short-term, charter market, rates are driven by the dynamics of supply and demand (see the chart below), which may differ by fleet segment. Generally, when demand growth exceeds supply growth, earnings in the short-term charter market tend to improve. However, this trend can be distorted by additional factors such as slow steaming (which has the effect of reducing effective supply, without being reflected in supply-side growth statistics) and idle capacity (which exacerbates the impact of supply growth). As at December 31, 2020, idle capacity was limited (1.2%—including ships being retro-fitted for Exhaust Gas Cleaning Systems, or “scrubbers”), while tightening regulations on emissions is expected to catalyse incremental slow steaming.

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Containership Earnings in the Spot Charter Market

are Shaped by Supply and Demand Fundamentals

(2020 and 2021 Data are Estimated & Forecast Values)

The Containership Spot Market Charter Rate Index used above is calculated using weighted average charter rates of vessels from 10 different fleet segments, with the weighting assigned according to the number of fixtures reported in each vessel size segment in a given year.

Evolution of Containership Time Charter Rates

in the Short-Term Charter Market, through February 28, 2021

It took time for the industry to digest the legacy orderbook pre-dating the Global Financial Crisis. However, starting in 2017, supply and demand fundamentals began to come back into balance, prompting charter rates in the spot market to firm. Rates improved faster, and more significantly, for larger ships in the charter market (ie. mid-size Post-Panamax ships) than they did for smaller ships (feeders). This phenomenon continued through 2019, and was exhibited most dramatically during the second half of 2020—when the rate recovery was led by larger tonnage, before filtering down to progressively smaller sizes as availability diminished in the larger segments.

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Evolution of Containership Time Charter Rates

in the Short-Term Charter Market, through February 28, 2021

The speed and strength of recovery in the charter market during 2H 2020 has been remarkable. As at December 31, 2020, rates for 2,500—2,750 TEU ships were up 150% on 2Q20 lows, while rates for Panamax ships (4,400 TEU ships) were up 242%, and rates for mid-size Post-Panamax ships (benchmark sizes 6,800 TEU, 8,500 TEU, and ECO-9,000 TEU) were up an average of 168%. This trend has continued into 2021. As at February 28, 2021, rates for 2,500—2,750 TEU ships (feeders) were up 191% on 2Q20 lows, while rates for Panamax ships (4,400 TEU ships) were up 356%, and rates for mid-size Post-Panamax ships (benchmark sizes 6,800 TEU, 8,500 TEU, and ECO-9,000 TEU) were up an average of 213%. As at February 28, 2021, charter rates for almost all containership sizes are above pre-COVID levels.

Asset Values

Asset values tend to correlate with earnings over time, albeit with a lag.

Containership newbuilding prices are dictated by the global supply of, and overall demand across all shipping sectors for, shipyard capacity; also the input costs faced by the shipyards themselves (primarily steel, labor, equipment and energy).

The secondhand market for containerships has grown along with the container shipping industry, particularly as charter-owners have increased their share of the fleet, driving an increase in the number of transactions. Secondhand containership sales can either be on a charter-free basis, where the vessel is delivered as-is, or with a charter contract attached. The latter is particularly common when liner companies are selling a vessel: charter-owners often find a sale and leaseback structure attractive for the contracted cash flow during the leaseback period, while liner companies take an asset off their balance sheet and release equity. The economics of such a transaction are negotiated as a function of purchase price, charter rate, charter duration, expected residual value of the vessel and counterparty risk.

Sale and purchase activity within the sector is influenced both by sentiment and by the availability of capital. A notable phenomenon in the second half of 2020 and the first two months of 2021 was the accelerated purchasing of secondhand tonnage by liner companies in order to cover their forward capacity needs in a strengthening demand environment with tightening supply fundamentals.

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Sale and Purchase Transactions for Containerships, by Size of Vessel, through December 31, 2020

Charter-free containership values between 2003 and 2008 were at elevated levels, driven by strong industry conditions, elevated charter earnings, and high newbuilding prices. However, as the earnings environment deteriorated at the end of 2008, asset values also came under pressure. Since the financial crisis, secondhand prices have—with the brief exception of 2010 and 2011—remained significantly below pre-crisis levels. However, after coming under pressure in the middle of the year, starting in 4Q2020 asset values began to firm—tracking strong earnings in the sector. This trend has accelerated into 2021.

The chart below shows the evolution of prices for newbuildings, five-year-old, ten-year-old and fifteen-year-old vessels, using an unweighted index across vessel sizes from 500 TEU to 13,000 TEU.

Price Index for Newbuild, 5-year-old, 10-year-old,

15-year-old, and 20-year-old vessels (100 = January 2000), through February 28, 2021

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The resale price of vessels (particularly older units) is also affected by fluctuations in vessel demolition prices. Vessel demolition prices are driven by scrap steel markets in the Indian Subcontinent, where the large majority of vessels are sold for re-cycling. Scrap pricing came under pressure during Q2 2020 when the big ship recycling facilities were largely closed, but have since recovered to pre-COVID-19 levels. Scrap prices are volatile; the 10 year historic average scrap price through 2020 is $399 per lightweight ton; as at February 28, 2021 scrap prices were around $450 per lightweight ton

Indian Subcontinent Containership Demolition Prices, $/ldt, 2000—February 28, 2021

The charts below show the evolution of, and correlations between, newbuilding prices, second hand asset values, and earnings in the short-term charter market over time. The first chart shows long term trends, while the second focuses on developments since the fundamentals-driven recovery commencing early-2017. Both charts also reflect the impact of seasonality and sentiment upon the sector.

Spot Market Time Charter Rate, Newbuild Price

and Secondhand Price Index Development, January 2000 through February 28, 2021

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Asset Value and Spot Market Time Charter Rate Development, September 1, 2016 through February 28, 2021

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TAX CONSIDERATIONS

Please see the section entitled “Item 10. Additional Information—E. Taxation” in our 2020 Annual Report and incorporated herein by reference. For purposes of this prospectus supplement, the discussion set forth in this section of our Form 20-F applies only to persons that will own our Class A common shares solely by reason of this offering.

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UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement, dated April 9, 2021, among us, the selling shareholders and Jefferies LLC, as representative of the underwriters named below and the joint book-running managers of this offering, the selling shareholders have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from the selling shareholders, the respective number of Class A common shares shown opposite its name below:

The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the Class A common shares from the selling shareholders if any of them are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated. We and the selling shareholders have agreed to indemnify the underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.

The underwriters have advised us that, following the completion of this offering, they currently intend to make a market in the Class A common shares as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and the underwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for the Class A common shares, that you will be able to sell any of the Class A common shares held by you at a particular time or that the prices that you receive when you sell will be favorable.

The underwriters are offering the Class A common shares subject to their acceptance of the Class A common shares from the selling shareholders and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commission and Expenses

The underwriters have advised us that they propose to offer the Class A common shares to the public at the public offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriters, at that price less a concession not in excess of $0.4219 per share of Class A common shares. After the offering, the public offering price, concession and reallowance to dealers, if any, may be reduced by the representatives. No such reduction will change the amount of proceeds to be received by the selling shareholders as set forth on the cover page of this prospectus.

The following table shows the public offering price, the underwriting discounts and commissions that the selling shareholders are to pay the underwriters and the proceeds, before expenses, to the selling shareholders in connection with this offering. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

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We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above which will be paid by the Selling Shareholders, will be approximately $200,000.

Listing

Our Class A common shares is listed on NYSE under the trading symbol “GSL”.

Stamp Taxes

If you purchase Class A common shares offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

Option to Purchase Additional Shares

The selling shareholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase, from time to time, in whole or in part, up to an aggregate of 675,000 shares from the selling shareholders at the public offering price set forth on the cover page of this prospectus supplement, less underwriting discounts and commissions. If the underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional shares proportionate to that underwriter’s initial purchase commitment as indicated in the table above.

No Sales of Similar Securities

We, our officers, directors (except for one director) and certain shareholders (the “Insiders”) of our Class A common shares have agreed, subject to specified exceptions, not to directly or indirectly:

This restriction terminates after the close of trading of the Class A common shares on the 60th day after the date of this prospectus.

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The foregoing restrictions will not apply to the registration of the offer and sale of the Class A common shares to be sold in this offering.

In addition, the foregoing restrictions shall not apply to the transfer of Class A common shares (i) as a bona fide gift; (ii) by will or intestate succession; (iii) if the Insider is a corporation, partnership, limited liability company, trust or other business entity and (1) transfers to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate, including without limitation any entity that is managed and governed by the same management company or investment advisor as the undersigned or any entity that is controlled by the Insider or (2) distributes Class A common shares to limited partners, limited liability company members or stockholders of the Insider; (iv) if the Insider is a trust, transfers to the beneficiary of such trust; (v) to the Company, to satisfy any tax withholding obligations of the Company or the Insider, or to satisfy the exercise price of stock options by the Insider, upon exercise by the Insider of stock options or vesting of outstanding restricted stock awards or other similar equity awards that have been granted by the Company prior to, and are outstanding as of, the date of the underwriting agreement; (vi) pursuant to a pledge in a bona fide transaction which is outstanding prior to or as of the date hereof to a lender to the Insider and disclosed in writing to the underwriters prior to the execution of the lock-up agreement; (vii) pursuant to an order of a court; provided, however, that in any such case, it shall be a condition to such transfer that the Insider agrees in writing to be bound by the lock-up restrictions.

Stabilization

The underwriters have advised us that they, pursuant to Regulation M under the Securities Exchange Act of 1934, as amended, certain persons participating in the offering may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the Class A common shares at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.

“Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares of our Class A common shares in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares of our Class A common shares or purchasing shares of our Class A common shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option to purchase additional shares.

“Naked” short sales are sales in excess of the option to purchase additional Class A common shares. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A common shares in the open market after pricing that could adversely affect investors who purchase in this offering.

A stabilizing bid is a bid for the purchase of Class A common shares on behalf of the underwriters for the purpose of fixing or maintaining the price of the Class A common shares. A syndicate covering transaction is the bid for or the purchase of Class A common shares on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions, the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our Class A common shares or preventing or retarding a decline in the market price of our Class A common shares. As a result, the price of our Class A common shares may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the Class A common shares originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.

Neither we, the selling shareholders nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our Class A

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common shares. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.

Electronic Distribution

The prospectus supplement and the accompanying prospectus in electronic format may be made available by e-mail or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of Class A common shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus supplement and the accompanying prospectus in electronic format, the information on the underwriters’ web sites and any information contained in any other web site maintained by any of the underwriters is not part of this prospectus supplement or accompanying prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.

Other Activities and Relationships

The underwriter and certain of its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriter and certain of its affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the underwriter and certain of its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. If the underwriters or their respective affiliates have a lending relationship with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The underwriters and their respective affiliates may hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities or the securities of our affiliates, including potentially the Class A common shares offered hereby. Any such short positions could adversely affect future trading prices of the Class A common shares offered hereby. The underwriters and certain of their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

In particular, Deutsche Bank AG, an affiliate of Deutsche Bank Securities Inc., acts as lender to us under a senior facility in an amount of $141,900 (the “Blue Ocean Credit Facility”). No net proceeds from the offering are expected to come to Deutsche Bank AG as a lender.

Disclaimers About Non-U.S. Jurisdictions

Canada

(A) Resale Restrictions

The distribution of Class A common shares in Canada is being made only in the provinces of Ontario, Quebec, Alberta, British Columbia, Manitoba, New Brunswick and Nova Scotia on a private placement basis exempt from the requirement that we and the selling shareholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of Class A common shares in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.

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(B) Representations of Canadian Purchasers

By purchasing Class A common shares in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us, the selling shareholders and the dealer from whom the purchase confirmation is received that:

(C) Conflicts of Interest

Canadian purchasers are hereby notified that certain of the underwriters are relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105—Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.

(D) Statutory Rights of Action

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the offering memorandum (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

(E) Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein and the selling shareholders may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

(F) Taxation and Eligibility for Investment

Canadian purchasers of Class A common shares should consult their own legal and tax advisors with respect to the tax consequences of an investment in Class A common shares in their particular circumstances and about the eligibility of Class A common shares for investment by the purchaser under relevant Canadian legislation.

European Economic Area

In relation to each Member State of the European Economic Area (each, a “Relevant State”), no Class A common shares have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the shares which have been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that the shares may be offered to the public in that Relevant State at any time:

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provided that no such offer of the shares shall require us or any of the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

For the purposes of this provision, the expression “offer to the public” in relation to the shares in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

Israel

This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of Class A common shares is directed only at, (i) a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.

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EXPENSES

The following are the estimated expenses of the issuance and distribution of the securities being registered under the registration statement of which this prospectus supplement forms a part, all of which will be paid by us.

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LEGAL MATTERS

The validity of the Class A common shares offered by this prospectus and certain other legal matters relating to United States and Marshall Islands law are being passed upon for us by Seward & Kissel LLP, New York, New York. The underwriters are being represented in this offering by Morgan, Lewis & Bockius LLP, Palo Alto, California. The selling shareholders are being represented in this offering by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.

EXPERTS

The consolidated financial statements incorporated in this Prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2020 have been so incorporated in reliance on the report (which contains an explanatory paragraph disclosing that the Company has entered into significant contracts with CMA CGM, a related party and the main source of the Company’s operating revenue, as described in Note 2(a) to the financial statements) of PricewaterhouseCoopers S.A., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The industry information attributed to MSI throughout this prospectus, including by incorporation by reference to the 2020 Annual Report, has been reviewed by MSI, which has confirmed to us that such information accurately describes the container shipping market.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

As required by the Securities Act, we filed a registration statement relating to the securities offered by this prospectus with the Commission. This prospectus supplement and accompanying base prospectus is a part of that registration statement, which includes additional information.

Government Filings

We file annual and special reports with the Commission. The Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. Our filings are also available on our website at http://www.globalshiplease.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.

Information Incorporated by Reference

The Commission allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you by referring you to those filed documents. The information incorporated by reference is considered to be a part of this prospectus supplement, and information that we file later with the Commission prior to the termination of this offering will also be considered to be part of this prospectus supplement and will automatically update and supersede previously filed information, including information contained in this document.

We incorporate by reference the documents listed below and any future filings made with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act:

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We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the Commission and certain reports on Form 6-K that we furnish to the Commission after the date of this prospectus supplement (if they state that they are incorporated by reference into this prospectus supplement), until we file a post-effective amendment indicating that the offering of the securities made by this prospectus supplement has been terminated. In all cases, you should rely on the later information over different information included in this prospectus supplement or the accompanying base prospectus.

We have authorized only the information contained or incorporated by reference in this prospectus supplement and the accompanying base prospectus, and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not, and the underwriters have not, authorized any other person to provide you with different information. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement as well as the information we previously filed with the Commission and incorporated by reference, is accurate as of the dates of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.

You may request a free copy of the above mentioned filings or any subsequent filing we incorporated by reference to this prospectus supplement by writing or us at the following address:

Global Ship Lease, Inc.

Attn: Ian J. Webber

c/o Global Ship Lease Services Limited

25 Wilton Road

London SW1V 1LW

United Kingdom

44 (0) 20 3998 0063

www.globalshiplease.com

Information provided by the Company

We will furnish holders of our Class A common shares and Depositary Shares representing Series B Preferred Shares with annual reports containing audited financial statements and a report by our independent registered public accounting firm. The audited financial statements will be prepared in accordance with United States generally accepted accounting principles and those reports will include a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section for the relevant periods. As a “foreign private issuer,” we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. While we intend to furnish proxy statements to any shareholder in accordance with the rules of the NYSE, those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. In addition, as a “foreign private issuer,” our officers and directors are exempt from the rules under the Exchange Act relating to short swing profit reporting and liability.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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