Thursday, June 13, 2013

Another Container Shipping Line Looks Toward Larger Vessels of 18,000+ TEU

Signs Are That UASC will join the Ranks of the Mega Box Carriers
Shipping News Feature

KOREA – GULF STATES – According to our sources in Seoul negotiations between the United Arab Shipping Company (UASC) and Hyundai Heavy Industries for the shipbuilder to supply up to seventeen container vessels are well advanced. The purchase has been strongly rumoured since UASC President and CEO Jorn Hinge hinted of future expansion when announcing the appointment of two new executives in April saying:

“UASC is preparing for significant changes on the back of new capacity coming into service with a major programme of new vessel acquisition. We are repositioning our offering to the market, recapitalising our business and optimising our trades. We are structuring our executive talent so that we can leverage their exceptional professional capabilities to deliver long-term value to our shareholders.”

Now it seems the plans are coming to fruition with a potential order for Hyundai of seventeen box ships, with a potential order for eleven 14,000 TEU vessels plus six at 18,000 to rival Maersk’s Triple E series and matching the similar order placed by China Shipping Container Lines (CSCL) last month for several vessels of their own. The two shipping lines have a cooperative partnership with joint services on the Asian/Europe routes which presumably means each will run equivalent size vessels to ensure continuity of capacity.

The CSCL order was also placed with Hyundai, the world’s biggest shipbuilder, in an order worth $700 million for five 18,400 TEU containerships designed to be the largest ever built which will feature an electronically-controlled main engine to maximise fuel efficiency and fitted with twin EcoBallast seawater treatment systems. The order surprised many as Chinese yards had tendered for the contract but the Korean group is the only one to have the depth of experience in constructing such supersized vessels.

The global shift from smaller vessels was covered in the BBC World News television piece on overcapacity to which we contributed. Slow steaming more environmentally friendly ships of similar size can prove far more economical – provided there is sufficient cargo to justify them. If the new UASC order is confirmed the first ships could be delivered as early as 2015. No confirmation of the order has been received from UASC at the time of writing despite our request for information.