Hong Kong’s liner giant Orient Overseas Container Line (OOCL) has signed up for 10 neo-panamax containership newbuildings worth close to $1.58bn at two shipyards in China.
Dalian Cosco KHI Ship Engineering Co (Dacks) and Nantong Cosco KHI Ship Engineering Co (Nacks) will each construct five vessels costing $157.58m apiece.
The order means the liner operator now has 22 large containerships on its orderbook at shipyards in China.
In an announcement, OOCL’s parent company Orient Overseas International Ltd (OOIL) disclosed that the 16,000-teu newbuildings were ordered by 10 indirect wholly-owned subsidiaries of the company.
News of OOCL planning to order neo-panamax boxship newbuildings was first reported in TradeWinds in April. At that time, the company was said to be seeking up to 15 ships of 15,000-teu.
OOIL did not disclose the type of fuel that will be power the containerships, but shipbuilding brokers with knowledge on the deal said the vessels will run on conventional marine fuels and will be fitted with scrubbers.
Nacks and Dacks, joint ventures of Japan's Kawasaki Heavy Industries and China Cosco Shipping, are slated to deliver the newbuildings between fourth quarter of 2024 and the last quarter of 2025.
OOIL said the order is in line with the company's plan to expand its fleet and consolidate its position in the top echelon of the liner industry.
“The increase of self-owned vessels as a result of the transaction would complement the group’s long-term strategic development and growth plan to meet market demand in the future,” said OOIL. “It would also benefit from the optimisation of its fleet structure and the reduction of its reliance on the vessel charter market.”
OOIL said the newbuildings will be equipped with energy saving and emissions reduction technologies, which will generate cost advantages as well as help in environmental protection.
The order for the neo-panamaxes lifts OOCL’s spending on its growing orderbook to almost $3.5bn. The company has 12 ships of 23,000 teu under construction at Nacks and Dacks. It ordered the megamax containerships between March and November last year.
The ultra-large containership newbuildings were reported to have an average cost of $156.84m each. They are also conventionally-fuelled vessels and will also be fitted with scrubbers.
Nacks and Dacks are slated to deliver them between 2023 and 2024.
Last month, OOIL reported its best six-month results in the company's history. It recorded a first-half profit of $2.81bn, up from just $102m for the same period of 2020.
Revenue jumped to $6.99bn from $3.42bn on higher freight rates and transport volumes.
The Hong Kong-listed company attributed the strong performance to healthy transpacific shipment demand, a recovering global economy and a series of supply disruptions across the globe.
OOIL is expecting the container shipping market to remain strong until early next year, with forecasts for high US imports and limited newbuilding deliveries.
OOIL is a subsidiary of state giant China Cosco Shipping container arm China Cosco Holdings, which also has containership newbuildings under construction.
Three months ago, Cosco contracted Cosco Shipping Heavy Industry (Yangzhou) to build six 14,092-teu vessels and four 16,180-teu ships. The larger containerships cost $155m each while the smaller vessels were priced at $146m apiece.
