Huge ship order shows Maersk bullish on trade

Betting on a continued rebound in global trade, Maersk Line has agreed to buy up to 30 giant container ships from Daewoo Shipbuilding and Marine Engineering of South Korea in a deal that could be worth US$5.7 billion.


Maersk, the world's biggest container line, said it had signed a contract to buy 10 ''Triple-E'' vessels at $190 million each. It has an option to buy 20 more, reported The Herald Tribune.


Despite its potential to bolster Maersk's competitiveness, company officials billed the order for the new ships as environmentally motivated. They christened the new class of container vessels Triple-E for "economy of scale, energy efficient and environmentally improved''.


The vessels will have a capacity of 18,000 TEUs and will be delivered from 2013 to 2015. They will have 16 percent more capacity than the company's largest existing vessels, known as PS-class ships.


Maersk will use the ships to carry cargo ranging from iPhones to powdered milk between Asia and the ports of Rotterdam, the Netherlands, Felixstowe, England and Bremerhaven, Germany, among the few Western ports big and deep enough to accommodate them. US ports are too small to handle such large ships.


In Asia, the vessels will call at five ports in China - Hong Kong, Yantian, Shanghai, Xiamen and Ningbo - serving the Asia-Europe trade.


Peter Rothausen, an analyst at Danske Markets in Copenhagen, said the order represented a sign of confidence in the turnaround in shipping last year, even as Maersk's competitors remained cautious for now.


From 2005 to 2008, shipyards were humming, building ever larger ships as ports expanded and new services opened. But the financial crisis and the ensuing decline in trade, as well as the removal of easy financing, pushed many liners close to the brink in 2009, leading them to scrap vessels, conduct ''slow steaming'' — operating ships at reduced speeds — or leave ships idle.


The order will help Maersk improve profit margins on routes between Asia and Europe, the most important in world trade. It expects five to eight percent annual growth in trade on those routes to 2015.


Should we decide to go for all 30 vessels, it is going to be close to $6 billion, and that will make it the largest order ever seen in shipping,'' Maersk Line's chief executive Eivind Kolding said. He added there was a 50 percent chance that Maersk would exercise its option for an additional 10 ships, but it was a ''long shot'' that it would buy the final 10.


The Triple-E vessels will be 400 m long, 59 m wide and 73 m tall. Maersk said they would produce 50 percent less carbon dioxide per container moved than the industry average for the Asia-Europe routes, a result of design improvements and lower fuel consumption.


The ships will consume 35 percent less fuel per container than similar vessels currently being delivered, it added.


They will be equipped with a ''waste heat recovery system,'' saving up to 10 percent of main engine power. The engines will be smaller than many other large container ships, operating at an average of only 19 knots, slightly slower than other large container ships.


The ships will also have a "green passport" so that 90 per cent of the components, including high-grade steel and copper, will be capable of being recycled at the end of the vessel's life of about 25 years.


The Maersk Line fleet comprises more than 500 vessels.


Daewoo is the world's No.2 ship builder, behind Hyundai Heavy Industries. South Korea has increasingly edged out Europe and Japan as the most cost-effective builder of large container ships.
(Source:http://www.cargonewsasia.com)