container ships markets
easily consume 300 tonnes of fuel a day. Massive investment has gone into new vessels especially on medium capacity post Panamax designs. In a groundbreaking move, Thenamaris booked four 5,000 TEU vessels from Hyundai Samho to add to its
first
newbuildings earlier ordered in China. The surprise was nomination of MAN Diesel special slow steaming G type main engines. These were originally introduced for larger ships, and especially VLCCs, but other Greek owners may follow the Thenamaris example for container ships. The new engine design is tailor made for sailing at speeds as low as 13 knots. MAN S type engine orders are growing for larger containerships as new designs potentially offer fuel savings of 4-7 per cent and a similar reduction in carbon dioxide emissions. Other Greek newcomers to the container segment include Paragon Shipping and Evalend Shipping, who switched four Kamsarmax bulk carriers into two each 4,800 TEU post Panamax container ships. More newbuilding debutants are Eastern Med Maritime, Aeolos Maritime, Capital Ship Management, Dynacom, Dryships and Goldenport. All are placing faith in the future for the more eco friendly container ship designs in the hope of a better market balance from 2013. MP
Sources for all figures in these tables: BRL Shipping Consultants. Data as at 17 December
The drop in vessel values is a double edged sword
While book values have decreased on trading vessels, there has never been a better time to order newbuildings. Maersk has led the way with the ordering of 20 18,000 TEU Triple E class vessels at Daewoo priced at US$190 million each. Since the Maersk orders,
ship values
have fallen by around 10 per cent as shipyards begin to find new orders more difficult to secure. Discounted pricing has surfaced in some cases and full advantage taken. Lower prices have definitely induced an ordering frenzy. There was a shake up of the top operators as they scrambled to compete. Seaspan and Neptune Orient Lines (NOL) largely escaped cash flow problems due to not ordering ships in the boom. Cash rich Seaspan continues a charter policy with purchase options from Chinese
charterers but has risen to the
challenge of Maersk after waiting for prices to drop. Talks have been held with Korean yards for eight to 10 18,000 TEU vessels but Seaspan has held back and is now unlikely to go ahead after the market downturn. The company instead has opted for eight plus an optional 10 14,000 TEU vessels from STX Shipbuilding valued at US$140 million apiece. This was further complemented with an order for seven
22 I Marine Propulsion I February/March 2012
plus an optional 18 10,000 TEU units shared between two Chinese yards. NOL also opted for its biggest ever ships placing 10 14,000 TEU ships with Hyundai Samho.
Moves by major operators to go for
larger, more economical, state-of-the-art ships are unlikely
to end in the near future. The
overall aim could be to force smaller operators out of existence. So far this has not succeeded but the pressure on small and medium tonnage operators is relentless. With the box sector so competitive all operators have to sharpen up their acts or perish.
A key consideration in ordering mega containerships is port infrastructure and load factors. This may be why competitors to Maersk have upped their game but stopped short of matching capacity levels. If cargo volume is there the economical benefits of mega size ships offer a powerful competitive advantage over smaller counterparts. The current Euro crisis however has currently
tempered ordering enthusiasm but only time will tell if earlier excessive ordering will inflict long term damage in the container trades. The mega size orders will not come on stream until 2014 and 2015. CMA CGM and MSC have
opted to look at increasing size of existing newbuildings to 16,000 TEU. The former has already taken action on newbuildings whilst MSC is considering action on its 14,000 TEU ships. Maersk ended 2011 as the largest container operator with a 16 per cent rise in the year and recovered previous lost business. Competitors are challenging this by forming a new G6 alliance for the Asia to Europe route employing 90 vessels on nine joint services. MSC and CMA CGM make up the top three fleets behind Maersk recording
significant TEU increases
through a succession of new deliveries and improving trade as shippers sought economy of scale through pooling arrangements. MSC also agreed long term charters on 16,000 TEU newbuilding orders placed by Zodiac Maritime, London. The latter is the sixth largest investor in new tonnage with 160,840 TEU capacity on order in addition to 59 ships already in service. A note of caution must however be sounded. Disappointingly, 38 ships were sold for recycling in 2011 compared with 178 deliveries. The world fleet stands at slightly over 5,000 ships. With 753 ships on order, of which 269 were ordered in 2011 alone, the likelihood of a dramatic market imbalance is all too apparent.
www.mpropulsion.com
MSC has taken full advantage of low charter rates
European feedership owners are looking at new co-operation agreements
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