Thursday, March 12, 2020

It Seems the Passion for Ever Larger Container Vessels Continues Unabated

Chinese Order a Raft of Giant New Box Ships
Shipping News Feature

CHINA – Orient Overseas Container Line (OOCL) has signed contracts with shipyards Nantong COSCO KHI Ship Engineering (NACKS) and Dalian COSCO KHI Ship Engineering (DACKS) for five new container vessels, each at a cost of $155.68 million with a nominal capacity of 23,000 TEU. The company expects to begin taking delivery of these vessels in the year 2023.

These five newbuilds are part of OOCL’s ongoing programme to introduce large, modern, and fuel-efficient vessels to further strengthen its fleet competitiveness, as well as fleet rebalancing by increasing the proportion of the ships the company owns in the core fleet whilst a number of vessels leased under long-term charters will be returned to the owners.

OOCL currently has six G-Class mega-vessels, each with a capacity of approximately 21,000 TEU. These G-Class vessels were ordered in March 2015, as the first step in OOCL’s expansion into this class of mega vessels for the Asia-Europe trade. The original plan at that time was to have ordered a second batch of five to six mega vessels. The shipping line says that this addition to the original order has never happened thus far, first due to the terrible market conditions of 2016, and then throughout 2017-2018 with focus being on the execution of the sale of the OOIL group to COSCO Shipping Holdings.

The announcement for this new order for 23,000 TEU vessels is this second step, and the company says that it is consistent with its strategic plan for further growth. OOCL will have the potential to independently form a complete loop in the Asia-Europe trade where it intends to deploy them in order to strengthen OOCL’s overall competitive position in the market and improve services to customers. Balancing this expansion, over the next five years OOCL says that it plans to return or dispose of 13 vessels from its fleet, a total of around 76,000 TEU.

The company says the new batch of vessels will help bring economies of scale to OOCL’s unit cost structure and enable the company to continue to play an influential role in offering more competitive and best-in-class services to customers. The latest engine technology and other state-of-the-art equipment will be used to achieve greater operational efficiency and reduce carbon emissions, in line with the company’s work and commitment to corporate sustainability and environmental protection.

As OOCL looks forward into the long-term future and, notwithstanding the current turbulence in the market, the company says that this investment in these long-term assets supports its strong belief in the Asia-Europe trade will remain as one of the world’s major corridors of commerce for decades to come.

It goes on to say that this initiative is a solid indication of confidence in the group’s dual brand strategy implemented upon COSCO Shipping Holdings’ acquisition of OOIL in 2018, with an overall objective to optimise its fleet structure, enhance its service capabilities in the global supply chain and meet measured growth objectives.

Photo: The OOCL ship Hong Kong and one of the line’s G class vessels was once the world’s largest box ship at over 21,000 TEU but the latest batch exceed even that.