Ocean Three News

The Coast Guard’s 353-ton, 154-foot fast response cutter (WPC) is capable of deploying independently to conduct missions that include port, waterways and coastal security; fishery patrols; search and rescue; and national defense. The service plans to build 64 of them to replace the 110-foot Island class patrol boats. The FRC has a range of 2,500 miles, but the endurance of the 24 crewmembers is normally limited to about five days based on the quantity of provisions carried. Both the 110s and 154s have about the same speed and range…

Malaysian port operator Westports Holdings Berhad  recorded FY17 container throughput of 9m TEUs which declined 10% YoY, in-line with our expectation of a poorer throughput outlook for the year. The decline was mainly due to drop in transhipment, while cushioned by strong growth in the gateway. Meanwhile, full compliance of MFRS 15 effective FY18 should be earnings-neutral. No changes made to our FY17-18E earnings forecasts. Maintain MARKET PERFORM and DDM-derived TP of RM3.70. Westports announced an update on its full-year FY17 container throughput, reporting in at 9m TEUs. This represents a 10% decline from 10m TEUs in FY16, in-line with our expectations of a poorer throughput outlook for FY17. This also implies 4Q17 container throughput of 2.2m (-14% YoY, +3% QoQ).

The withdrawal of Hanjin tonnage has not been enough to rectify the trade’s supply-demand imbalance and headhaul ship utilisation is lower compared to other major East-West markets. Westbound volumes rose by 1.8% in the third quarter and the growth rate for the year to date is now registering 2.9% (see Figure 1). Asian exports shipped to the West Mediterranean (including North Africa) grew by 2.8% between July and September, while traffic to the eastern sector of the trade only expanded by 0.8%. By the end of September, the 12-month rolling average growth factor for westbound flows was touching 3.4% (see Figure 2) which is a distinct improvement on the minus 1.9% recorded a year earlier, and represents the highest point it has reached since March 2015.

The European Commission said on Friday it had cleared French shipping group CMA CGM's $2.4 billion takeover of Neptune Orient Lines on condition that NOL pulls out from a rival shipping alliance. The announcement confirms a Reuters report on April 21 about the impending approval. CMA CGM, the world's third-biggest container shipping company, is looking to strengthen its position against bigger rivals Maersk Line and Swiss-based Mediterranean Shipping Co (MSC). The European Commission said in a statement that its approval was conditional on CMA CGM's commitment to withdraw NOL from the G6 alliance, which competes with its own Ocean Three alliance.

Mergers and acquisitions, rather than the historically more popular alliances, are inevitable to address chronic overcapacity and drive further cost savings in container shipping, Fitch Ratings says. The merger talks between Hapag-Lloyd and United Arab Shipping Company (UASC) announced last week demonstrate that full-blown M&A deals are gaining momentum. Although capacity on the Far East to Europe trade routes is dominated by just four alliances - 2M (36% of the total fleet capacity in September 2015, according to A.P. Moller-Maersk), CKYHE (24%), Ocean Three (21%) and G6 (18%) - container shipping remains effectively fragmented, highly competitive and plagued by overcapacity.

EU approval conditional on NOL pulling out from G6 alliance. French shipping group CMA CGM's $2.4 billion takeover of Neptune Orient Lines is set to be cleared by the European Union's competition regulators, on condition that NOL pulls out from a rival shipping alliance, two people familiar with the matter said on Thursday. CMA CGM, the world's third-biggest container shipping company, is looking to strengthen its position against bigger rivals Maersk Line and Swiss-based Mediterranean Shipping Co (MSC). CMA CGM's plan to withdraw NOL from the G6 alliance, which competes with its own Ocean Three alliance, was able to address European Commission concerns, the people said.

France's CMA CGM and China's COSCO Container Lines are to form a four-way vessel-sharing alliance with Evergreen Line and Orient Overseas Container Line focused on Asia routes, CMA CGM said on Wednesday. Container shipping has seen route-sharing develop in response to a severe downturn in the market, and a rejigging of alliances had been expected in recent months after COSCO merged with China Shipping Group and CMA CGM agreed to acquire Singapore's Neptune Orient Lines (NOL).

China Cosco Shipping plans to retain its current container alliances until they expire, after which it plans to sign a new deal, it said on Monday. The group's spokesman, Yu Zenggang, did not say when the current alliance agreements were due to expire. China COSCO , a unit of COSCO, is part of the CKYHE alliance with Kawasaki Kisen Kaisha, Yang Ming Marine Transport, Hanjin Shipping and Evergreen Marine, while China Shipping Container Lines , a unit of China Shipping Group, CMA CGM CMACG.UL and United Arab Shipping Co make up the Ocean Three alliance.

Several of the world’s top container lines are entering in different vessel-sharing alliances following the current wave of mergers and acquisitions among carriers, reports China Daily. There has been reports that had shocked the containership transport industry - the possible mega-alliance between French liner CMA CGM and China Cosco Shipping (COSCOCS), the recently merged China’s biggest shipping line. Formed by Denmark's Maersk Line and Switzerland's Mediterranean Shipping Co SA, the 2M operates more than 2.1 million twenty-foot equivalent units (or TEUs, the industry measurements of capacity of container ships and terminals), and owns 193 vessels.

China Cosco Shipping (COSCOCS), China's biggest shipping line, plans to carry out a careful selection of its future vessel-sharing alliance partners, but will maintain its two current alliances for the moment, the company said on Friday. Analysts have said the global network of vessel-sharing alliances on container routes could be shaken up by recent deals, including the formation of COSCOCS through the merger of China Ocean Shipping (Group) Company (COSCO) and China Shipping Group. China COSCO , a unit of COSCO, is part of the CKYHE alliance with Kawasaki Kisen Kaisha, Yang Ming Marine Transport, Hanjin Shipping and Evergreen Marine, while China Shipping Container Lines , a unit of China Shipping Group, CMA CGM and United Arab Shipping Co make up the Ocean Three alliance.

Paris-based consultancy, Alphaliner, reports “a new mega alliance appears to be in the making,” as French container shipping major CMA CGM and its Chinese counterpart China COSCO lead efforts to set up a new carrier partnership. (Marine Link has reported about this last week. The duo is also seeking to also rope-in Evergreen and OOCL in a plan that could potentially split up three of today’s four main East-West alliances. The movement that will radically alter the current liner shipping landscape and leave the eight remaining carriers of the Ocean Three, CKYHE and G6 alliances in the lurch. "Discussions are believed to be still ongoing and the carriers involved have not yet publicly announced their plans,” Alphaliner analysts say.

The newly-formed shipping giant China Cosco Shipping Corporation and CMA CGM met recently in Shanghai to discuss the possibility of a new French-Asian alliance, say local Chinese media. According to sources,  the alliance would also include Orient Overseas Container Line (OOCL). If it happens it would be shake-up the present structure of maritime alliances of container companies. China Cosco Shipping Corporation - which is made up of Cosco and CSCL - is likely to own 832 ships including containers, dry-bulk vessels and tankers amounting to almost $22 billion. Together with NOL and its subsidiary APL, CMA-CGM remains in third place, but would rise to 2.3 million TEUs of total capacity, behind Maersk and MSC.

CMA CGM is testing the ability of the U.S. West Coast ports to handle the biggest containerships – are they ready? U.S. West Coast ports are not yet in a position to handle 18,000 teu containerships regularly and have much work to do in terms of improving productivity if they are to see them call on anything other than an ad-hoc basis. The 18,000-teu CMA CGM Benjamin Franklin will become the largest containership to call at any U.S. port when it arrives at the port of Los Angeles on 26 December. The new ship was delivered to French carrier CMA CGM at the start of the month and will join the Asia-U.S. West Coast ‘Pearl River Express’ service, part of the Ocean Three network, that normally operates with seven ships of around 11,400 teu.

United Arab Shipping Company (UASC) announced a record breaking load of 18,601 TEUs on board M.V. Al Muraykh, one of the world’s three greenest vessels currently operated by UASC. The ultra-large container vessel departed Port Klang in Malaysia bound for Felixstowe - UK as part of AEC1 service carrying 18,601 TEUs. The vessel will be sailing for two weeks. This unprecedented westbound shipment is also UASC’s highest utilization to date of this very eco-efficient class, meaning the CO2 output per TEU on this journey is set to be more than 60% lower if the same containers were shipped on board a 13,500 TEU ship. Containers on board were loaded by UASC and its partners in the Ocean Three alliance. M.V.

United Arab Shipping Company (UASC) announced a record breaking load of 18,601 TEUs on board M.V. Al Muraykh, one of the world’s greenest vessels currently operated by UASC. The ultra-large container vessel departed Port Klang in Malaysia bound for Felixstowe - UK as part of AEC1 service carrying 18,601 TEUs. The vessel will be sailing for two weeks. This unprecedented westbound shipment is also UASC’s highest utilization to date of this very eco-efficient class, meaning the CO2…

The proposed cash acquisition of NOL at SGD 1.30 per NOL share, represents a 49% premium to NOL’s unaffected share price. Strategic acquisition resulting in combined turnover of USD 22 billion and fleet size of 563 vessels. CMA CGM, a global leader in container shipping, today announces a pre-conditional voluntary general cash offer for Neptune Orient Lines (NOL), Southeast Asia’s largest container shipping company (SGX: N03), subject to the satisfaction of the pre-conditions specified in such announcement. NOL’s majority shareholders (Temasek and its affiliates) have irrevocably undertaken to tender all of their shares in acceptance of the Offer.

A China Ocean Shipping Company COSCO-China Shipping Container Lines (CSCL)merger makes financial sense, but would have huge implications for competition in the container shipping industry, according to Drewry Maritime Research. Drewry Shipping Consultants has released a report examining the consequences of a rumoured merger between China’s two shipping giants. The merger will have a domino effect on the existing alliance structure of the container shipping industry and could see other Asian countries follow China’s lead. The merger will have a severe impact on the current shipping alliances, with the Middle East’s United Arab Shipping Company standing to lose the most.

CMA CGM and Ocean Three partners  announced optimization on Asia-Europe routes, which aims to reduce capacity and to improve the rates efficiency. The Ocean Three Alliance have decided to harmonize FAL2 and FAL3 in order to adapt to the current market situation between Asia and Europe. They will offer a new optimized rotation. Instead of two services FAL2 and FAL3 will be launched service FAL23, adding the ports of call in Cai Mep Deep Sea Terminal (Vietnam), Felixstowe (UK) and Chiwan (China). The route will employ 12 vessels with capacity in range 12,000-15,000 TEU. The first voyage from the new service will be made by CMA CGM La Perouse starting from Antwerp on September 28. The routes optimization was approved by the three members of the alliance – CMA CGM, CSCL and UASH.

China Shipping Container Lines Co is planning to buy around 10 ultralarge container ships for around $1.5 billion, despite the shipping industry struggles with a capacity glut, reports WSJ. The company wants to fulfill capacity commitments in its Ocean Three alliance with France’s CMA CGM SA and the United Arab Emirates’ United Arab Shipping Co. The new ships would add to an estimated 30% excess capacity in the water between Asia and Europe. The glut has led to falling freight rates that often don’t even cover the fuel cost of vessels. The economic slowdown of emerging economies in Asia—including China, the world’s biggest exporter of manufactured goods that are moved on container ships—has made things still worse for the shipping industry.

INTERSCHALT maritime systems AG announced it will equip the fleet of the liner shipping company United Arab Shipping Company (UASC) with the stowage planning software StowMan[s]. Developed in cooperation with the IT University of Copenhagen and launched in September 2014, the stowage planning software particularly stands out with the unsurpassed speed with which it can create multiple plans for optimizing container stowage on board, INTERSCHALT said. In an iterative process, the…

Global shipping consultancy Drewry predicts the container ship industry will be "lucky to break even this year" as shipping rates slump due to catastrophic overcapacity. A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015. Drewry’s new view of the market revises its earlier forecast that carriers would collectively generate profits of up to $8 billion in 2015. Drewry now says that its revised view is that carriers “will be lucky to break even this year,” meaning some lines will be back in the red by year-end. Despite first quarter industry operating margins of 8%, cost savings through falling oil prices were passed onto shippers by carriers in the form of much lower freight rates.

A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015, according to the Container Forecaster report published by global shipping consultancy Drewry. Earlier this year Drewry forecast that container shipping carriers would collectively generate profits of up to $8 billion in 2015, but our revised view is that it will be lucky to break even this year. This means that some lines will be back in the red by the end of 2015.

French container line CMA CGM’s consolidated net profit soared to $406 million in the first quarter from $97 million a year ago as the French carrier capitalized on efficiency gains, cost cuts and sharply lower bunker prices. Net profit went up at CMA CGM by nearly 420% as the company optimized its network and began to reap benefits from the Ocean Three Alliance during the first quarter of 2015. The world’s third largest container line handled 3.1 million TEUs during the given period, and the rise was attributed to the increase in volumes on the East-West lines, particularly to and from the US, where volumes enjoyed sustained growth, and also from the launch of the Ocean Three Alliance.