OOCL places mega box ship order

OOCL has signed newbuilding contracts with shipyards Nantong COSCO KHI Ship Engineering Co (NACKS) and Dalian COSCO KHI Ship Engineering Co (DACKS) for five new container vessels, each at a cost of US$155.68M with a nominal capacity of 23,000 TEU. Delivery of these vessels is expected to start in 2023.

OOCL said “These five newbuildings are part of our ongoing programme to introduce large, modern and fuel-efficient vessels to further strengthen our fleet competitiveness. They will allow us to rebalance our fleet by increasing the proportion of the ships we own in the core fleet, while a number of vessels leased under long-term charters will be returned to the owners.”

Today, OOCL has six G-Class mega-vessels, each with a capacity of approximately 21,000 TEU. These 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 was to order a second batch of five to six mega vessels. However, this addition to the original order has not happened this far. Explaining why, OOCL saId “First because of the terrible market conditions of 2016, and then throughout 2017-2018 the focus was on executing the sale of the OOIL group to COSCO Shipping Holdings.

“The announcement for this new order for 23,000-TEU vessels is indeed this long-awaited second step and is consistent with our strategic plan for further growth. We will have the potential to independently form a complete loop in the Asia-Europe trade where we intend 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 plans to return or dispose of 13 vessels from its fleet, a total of around 76,000 TEU, after successful long-term service in its group.

Furthermore, these new 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”.

OOCL said the latest engine technology and other state-of-the-art equipment will be used to achieve greater operational efficiency and reduce carbon emissions.

OOCL summed up “As we look forward into the long-term future, and notwithstanding the current turbulence in the market, today’s investment in these long-term assets supports our strong belief in the Asia-Europe trade as one of the world’s major corridors of commerce for decades to come.

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