ONE is a boost to the trio of Japanese carriers and the container shipping market
The launch of Ocean Network Express (ONE) has created one of the top 10 most valuable container ship fleets on the water and boosted the position of its three Japanese carriers in terms of TEU volume.
It has also moved Singapore-based container ship ownership up two spots in the top 10 container owner nations by value, said VesselsValue.
ONE (MOL, NYK and K Line) has 65 owned vessels at a total of 511,015 TEU, and a value of US$2.25Bn. When chartered vessels are included in this figure, the figure stands at 115 vessels at a total of 1.5M TEU (according to Alphaliner figures).
In terms of fleet size (both owned and chartered), it is at number six in the Alphaliner top 100 largest ocean carriers, with a market share of 7%. Last year, NYK was at number 10, MOL at 11 and K Line at 14.
MOL has provided the largest number of ships and TEU capacity of live ships, with 26 ships at 232,466 TEU, followed by K Line at 23 ships of 162,177 TEU. NYK provided 16 ships at 116,372 TEU.
Despite the formation of ONE, NYK will retain ownership of 45 vessels outside the partnership at a combined 306,304 TEU. By contrast K Line and MOL have plunged nearly their entire owned container ship fleets into ONE, with the former leaving just three ships out of the fleet and the latter, two vessels.
The company has been restrained in terms of ordering in capacity, as its combined orderbook shows. According to VesselsValue data, it only has 125,610 TEU on its orderbook, including one 14,000 TEU vessel being built by NYK, five vessels consisting of a combined 70,000 TEU for MOL and 41,610 (three vessels) for K Line. However, the focus is on the ultra large container ship, with the average size of the newbuilds on order being around 14,000 TEU.
The new fleet is composed of a mix of container ships, with most capacity being in the post Panamax size, said VesselsValue.
VesselsValue analyst Court Smith told Container Shipping & Trade “The alliance does include some ULCSs and the fleet operates across most key markets in Asia and in the transatlantic trade, a network that spans 200 ports.”
He said it remains to be seen what impact the merger will have on asset values in the short and medium term, which have been improving over the past several months. However, he noted that the value of the ships included in the fleet have increased by 26.9% from their lowest point seen in early 2017. Furthermore, “the diversification of the fleet size across various market segments should create a more stable cash flow for the new entity”.
The creation of ONE should be positive for the container shipping market too. Mr Smith said “The consolidation of commercial control of these new ships should help rates in a market that is plagued by overcapacity.”
He added “We expect to see more interest in opportunistic mergers and acquisitions ahead as asset values remain cheap despite their recent gains and low earnings will encourage those with a weaker balance sheet to become willing sellers.”
Singapore is now at number six in the top 10 league table for container owner nations by value. It has 272 vessels at US$9.3Bn. It is above Switzerland, France, Taiwan and the United Kingdom. China comfortably tops the table, with a total vessel value of US$21.4Bn.