There has been a raft of ultra large container ship (ULCS) newbuild orders. Barry Luthwaite looks at the current orderbook and examines future potential
After a lull in ordering, and despite warnings of a slump for ULCS employment, orders for these giants have recommenced.
The recent talking point has been Evergreen Marine’s huge order for 11 23,000-TEU container ships from South Korean and Chinese yards. The orders are a breakthrough for China with Hudong-Zhonghua and Jiangnan Shipyard constructing two vessels each. Evergreen had been widely tipped to choose Imabari in Japan to construct some on a charter basis from its shipowning wing Shoei Kisen Kaisha. The orders show how far China has come against big rivals in South Korea and Imabari for export business. The remaining seven vessels were awarded to Samsung who have almost completed a G-series of ULCSs for the Taiwanese owner. The world container fleet hit a new high recently when a 23,000-TEU ULCS was commissioned leading the way in maximum capacity. Will this now be the new size parameter the major box operators will chase and seek to overcome for prestige?
A ULCS is defined as 18,000+ TEU capacity with a shipyard’s limit put at 26,000 TEU. It remains to be seen if this figure will ever be reached because port infrastructure needs to be considered for ship handing purposes. Before the Evergreen order it had been over a year since a ULCS was last contracted reflecting fears of oversupply and not enough scrapping of smaller sizes. The Evergreen orders work out at about US$155M per ship but there may be slight adjustments for the Chinese vessels.
Statistically there are currently 50 ULCSs on order which will eventually commission 1,093,442 TEU into the global fleet between now and 2022. This contrasts with 108 ULCS already in service aggregating 2,131,043 TEU capacity. Some of the giant shipowners welcome a pause in ordering to take stock of positions. With IMO 2020 just a few weeks away there are hopes of a major clear out of smaller tonnage where owners are not prepared to spend extra money on ageing ships, especially when costs could span between US$1-3M per ship to meet IMO 2020 cleaner air emission regulations.
New efforts are being made to find new markets as the lucrative Asia-Europe routes are the major employers for ULCSs which are restricted to port access by their sheer size. This will not be easy. Another problem is port congestion where vessels lose time on schedules due to a slower turnaround because of cargo volumes, which need greater handling and infrastructure provision especially with lightering provisions. Such issues caution against more orders, but the industry rarely listens and owners not wishing to lose out in fierce competition just follow the leaders.
|18000 - 18,999||
|20,000 - 20,999||3||178,240||3||61,276||6||122,202|
|22000 - 22,999||2||370,000||8||178,240||10||222,240|
|23000 - 23,999||16||370,000||11||253,000||27||
ULCS on order
|Evergreen Marine Corp||11||253,000|
|Hyundai Merchant Marine||12||276,000|
|Shoei Kisen Kaisha||13||248,202|