China Shipping Line to Buy 10 Vessels
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.
The order from CSCL, the container-shipping arm of state-owned giant China Shipping Group, would involve ships capable of carrying up to 20,000 containers from China to Northern Europe, the people involved in the matter said.
Three Chinese shipyards—Dalian Shipbuilding Industry Co., Shanghai Waigaoqiao Shipbuilding Co. and Hudong-Zhonghua Shipbuilding Group Co.—are vying for the contract, with deliveries expected in 2018 or early 2019, the people said.
