Big Ship Orders for Prestige

A recent report by Drewry suggests that the current desire to order and build large container ships is being driven by prestige rather than economic forecasts.

The maritime research company highlighted that both MSC and CMA CGM have orders in place for 22,000 TEU vessels, which are larger than any current vessels, and suggested that these may not be the last.

UniOcean Lines October article advised how China Shipping MSC, MOL and Maersk have all been the owners of the world’s largest container ship in the last few years, before OOCL took the sought after accolade this year.

UniOcean Lines also reported on COSCO embarking on a new ship building program, which was also covered in the Drewry report, stating that 11 of their 20 ships on order will be over 20,000 TEU.

Drewry went on to say “Our rationale for being doubtful on new orders included financing constraints, latent market overcapacity and the size of the existing orderbook”

“We believe that the scale economies argument for wanting ULCVs (Ultra Large Container Vessel’s) in the first place is false, as cost savings at sea are countered by higher costs at port, which in theory should have reduced the industry’s appetite for them.”

Steve Ireland – UniOcean Lines Managing Director – echoed their findings regarding higher costs at port, and added “The time taken to unload these behemoth ships is also affecting container transport. Containers unloaded on day one are not released until all containers are unloaded, which could be on day two or three, and this is creating bottle necks”.

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