Global shipping consultancy Drewry says a recent order from China COSCO for 11 ultra-large containerships (ULCVs) underscores the industry’s position that giant containerships are the way of the future.
China COSCO last week confirmed the much anticipated $1.5 billion order for 11 19,000 TEU ships from four different Chinese yards. The vessels are scheduled for delivery in 2018.
Drewry notes that the “arms race” for ULCVs of 18,000 TEU and above continues quickly, with nine carriers now, including COSCO, who either have ships of this size currently in their fleet of on order. More are expected to follow as China Shipping Container Lines (CSCL) is reportedly is on the verge of order 11 more ULCVs, while Japanese shipyard Imabari has also reportedly received an order for four 20,000 TEU units from an unidentified owner, Drewry reports.
According to Drewry, the average price for each ship ordered by COSCO comes in at $137.4 million, a discount of around $10-20 million paid by other lines for similar-sized vessels, a measure of the Chinese shipbuilding industry’s need for new orders. So far the vast majority of ULCVs have so far been ordered from South Korea. Drewry adds to give a sense of the newbuild price deflation, Maersk’s 20 18,000 TEU “Triple-E’s” ordered in February 2011 cost $190 million per ship.
“There is no going back from this point as the industry has made it abundantly clear that they see these ULCVs as the future,” says Drewry in an article published to its website.
But recent developments have exposed their inflexibility somewhat, leaving carriers juggling with the newfound capacity, Drewry says. “The alarming drop in Asia to Europe traffic and a parallel crash in rates caused two of the big carriers groups to take the unprecedented decision to suspend services in the supposed peak season, while the two other alliances have been tinkering with missed sailings in order to try and support higher rate requests.”