CMA CGM and OOCL reportedly ordering containerships
Date: Thursday, January 24, 2019
Source: American Shipper
More than 1 million TEUs will be delivered in 2019 and 2020, according to forecasts.
CMA CGM officials declined to confirm the deal when contacted by American Shipper.
Loadstar said rumors “have been recently circulating in the industry that COSCO subsidiary OOCL is about to place an order at a Chinese yard for six 23,000-TEU LNG-ready ULCVs (ultra large container vessels).”
The reports follow an article by Drewry in its Container Insight Weekly that says 26 containerships with at least 18,000-TEU capacity were delivered to carriers in 2018 with aggregated capacity of 525,500 TEUs. Drewry there were confirmed deliveries of ULCVs that will add container capacity of 460,000 TEUs in 2019 and 620,000 TEUs in 2020.
Simon Heaney, senior manager of container research at Drewry said that "Aside from delays/cancellations to existing contracts, deliveries from the orderbook are pretty much fixed for the next two years due to the build time required."
As a result, if the reported CMA CGM and OOCL materialize, Heaney thought they would be slated for late-2021 or 2022 delivery.
He noted that there will be a need for new ships for 2021-22 onwards, particularly if scrapping intensifies as expected, but the real risk from such deals as HMM and Cosco’s is that they will trigger copy-cat reactions from other lines that will tip the balance. For the time being, I retain the view that most other lines have moved on from ULCVs and will focus investment elsewhere, such as trying to capture more of the supply chain. If I’m wrong and there is another arms race, the industry will inevitably suffer – something I think most sensible carriers are fully aware of," he said.
Drewry had said its view was that “the amount of ULCVs arriving over the next few years is an unwanted legacy from a period when carriers were overconfident in the market and possibly misguided in the benefits those ships offer. Nonetheless, we believe they will be able to mitigate the capacity inflation by delaying deliveries and slowing services.”
It noted that Maersk and MSC are planning to introduce six extra ships into 10 of their services between Asia and North Europe or Asia and the Mediterranean.
Drewry observed, “By adding more ships onto the same number of services (there will, however, be a net reduction of eight port calls in the network) the carriers said they will be able to improve schedule reliability by adding ‘extra operational buffer.’
“The decision to slow ships down is probably also motivated by a desire to reduce ship fuel consumption in light of the anticipated higher bunker costs associated with IMO 2020, but nonetheless it will enable more ships to be entered into the trade without adversely hiking up capacity,” it added.