Mediterranean Shipping Company (MSC) is poised to become one of the biggest owner-operators of ultra-large container ships with its latest vessel order. MSC is adding capacity even as container rates continue to slide.
MSC is linked to an order for five ships with 23,000 twenty-foot equivalent units (TEUs) in capacity, according to PR News Service.
The ships are being built at Korea’s Daewoo Shipbuilding and Marine Engineering for a reported cost of $762 million, according to The Wall Street Journal. Delivery of the five vessels is expected to begin in the first quarter of 2021.
It was not immediately clear if the vessels are new orders or options on an 11-ship order that MSC made in 2017. The other six ships, all in the 23,000-TEU range, are being built at Korea’s Samsung Heavy Industries, with the last expected to be delivered by the first quarter of 2020.
Those 11 ships will join another 20 MSC-chartered vessels above 19,000 TEUs in capacity. MSC, which runs the second-largest global container ship fleet, will see its total capacity increase just over 6% through 2021 with the new fleet additions.
MSC’s order follows another one from Evergreen Marine. The Taiwanese carrier confirmed in October that it would go ahead with shipbuilding contracts for six 23,000-TEU vessels at Samsung at an estimated cost of $960 million. The first vessels are expected to be delivered in the second quarter of 2022.
CMA CGM will take delivery of nine ships in the 22,000-TEU capacity range through the end of 2020. Its OCEAN Alliance partner COSCO Shipping took delivery of six container ships between 19,000 and 21,000 TEUs in capacity this year, adding to the 19 ultra-large container ships it and Orient Overseas Container Line operate.
The vessels are being put into the Asia-North Europe trade lane, which is already suffering from a major capacity glut in ocean shipping. The Freightos Baltic Daily Index for China-North Europe and China-Mediterranean are sitting at six-month lows.
All in, ocean carriers are expected to add 24 ultra-large container ships to the world fleet before the end of 2020, said research firm Alphaliner, bringing the average size ship on the Asia-Europe trade lane to 17,000 TEUs.