- OOCL signed contracts to place new order for five new container vessels.
- The vessel will cost $155.68 million with a nominal capacity of 23,000 TEU.
- It is a part of OOCL’s program to introduce large, modern, and fuel-efficient vessels.
- OOCL currently has six G-Class mega-vessels with a capacity of approximately 21,000 TEU.
- It is a solid indication of confidence in the group’s dual-brand strategy.
According to an article published in Handy Shipping Guide, Orient Overseas Container Line has signed contracts with shipyards Nantong COSCO KHI Ship Engineering and Dalian COSCO KHI Ship Engineering for five new container vessels.
Obsession with large container vessels
Each vessel will cost $155.68 million with a nominal capacity of 23,000 TEU. The company expects to begin taking delivery of these vessels in the year 2023.
These five newbuilds are part of OOCL’s ongoing program to introduce large, modern, and fuel-efficient vessels to further strengthen its fleet competitiveness, as well as fleet rebalancing by increasing the proportion of the ships the company owns in the core fleet whilst a number of vessels leased under long-term charters will be returned to the owners.
OOCL’s fleet strength
OOCL currently has six G-Class mega-vessels, each with a capacity of approximately 21,000 TEU. These G-Class vessels were ordered in March 2015, as the first step in OOCL’s expansion into this class of mega vessels for the Asia-Europe trade. The original plan at that time was to have ordered a second batch of five to six mega vessels. The shipping line says that this addition to the original order has never happened thus far, first due to the terrible market conditions of 2016, and then throughout 2017-2018 with the focus being on the execution of the sale of the OOIL group to COSCO Shipping Holdings.
Strategic plan for further growth
The announcement for this new order for 23,000 TEU vessels is this second step, and the company says that it is consistent with its strategic plan for further growth. OOCL will have the potential to independently form a complete loop in the Asia-Europe trade where it intends to deploy them in order to strengthen OOCL’s overall competitive position in the market and improve services to customers. Balancing this expansion, over the next five years OOCL says that it plans to return or dispose of 13 vessels from its fleet, a total of around 76,000 TEU.
Bringing economies of scale to OOCL’s unit
The company says the new batch of vessels will help bring economies of scale to OOCL’s unit cost structure and enable the company to continue to play an influential role in offering more competitive and best-in-class services to customers. The latest engine technology and other state-of-the-art equipment will be used to achieve greater operational efficiency and reduce carbon emissions, in line with the company’s work and commitment to corporate sustainability and environmental protection.
As OOCL looks forward to the long-term future and, notwithstanding the current turbulence in the market, the company says that this investment in these long-term assets supports its strong belief in the Asia-Europe trade will remain as one of the world’s major corridors of commerce for decades to come.
Confidence in dual-brand strategy
It goes on to say that this initiative is a solid indication of confidence in the group’s dual-brand strategy implemented upon COSCO Shipping Holdings’ acquisition of OOIL in 2018, with an overall objective to optimize its fleet structure, enhance its service capabilities in the global supply chain and meet measured growth objectives.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: HandyShippingGuide
