In a bid to fulfil capacity commitments with the shipping alliance ‘O3’, China Shipping Container Lines (CSCL) is to spend around US$1.5 billion on 10 ultra-large container ships of 20,000 TEU each, according to the Wall Street Journal.
This order follows the carrier’s recent order for eight 13,500 TEU ships which were ordered to stay ahead of the development trend for larger-scale ships.
Jonathan Roach, a container-shipping Analyst at Braemar ACM Shipbroking, said: “CSCL’s O3 partners and competitors have already ordered or operate a substantial number of ultra-large container ships, so the Chinese liner has little choice but to boost its fleet if it is to remain competitive in the big league.
“At some point, oil prices will go up and operators that sail [ultra-large ships] will have a clear advantage, as the cost of moving a container on those big vessels is 25% less on average compared to older, smaller vessels.”
CSCL recently saw a 97% drop in its profits and its total capacity reaching more than 900,000 TEU.
The company is anticipating a more lucrative operating position if its proposed merger with Cosco shipping comes into fruition and will likely jump up to the fourth spot and closely following Maersk, MSC, and CMA CGM, respectively.
Although the planned ships are bigger than the current biggest ship sailing in the world – the MSC Oliver / Oscar / Zoe at 19,224 TEU – at 20,000 TEU they are just smaller than OOCL’s planned 21,150 TEU vessel.