Since last year’s focus on alliance structuring by the leading container lines, there has been plenty of speculation that a new wave of very large containership ordering would take place. In the first half of 2015 this clearly came to bear. So what have been the key trends and what are the implications for the container shipping sector as a whole?

Land Of The Giants
 The first containerships of 18,000 TEU or above were ordered back in 2011, with Maersk Line’s original ‘Triple-E’ order in February of that year. At the start of July 2015, the 18,000+ TEU orderbook stood at 58 ships of 1.1m TEU (with a further 28 units already delivered into the fleet). Following the rejection by the regulatory authorities of the proposed ‘P3’ alliance in mid-2014, the focus of the rest of last year for many carriers was on alliance structuring.

 But in 2015 so far, a number of operators have finally taken the decision to upsize to ‘mega’ boxships. In the first half of the year a total of 37 orders were reported for units of 18,000+ TEU, including (for the first time) a number of contracts for vessels of 20,000+ TEU. The 18,000+ TEU orderbook, as a proportion of the total boxship orderbook in capacity terms, rose from 18% at the start of 2015 to 32% at the start of July.

Charter Owners’ Impact
 During this period, many leading carriers have invested in ‘mega’ boxships on their own account, but a number of operators have also opted to access tonnage of this size on the basis of long-term timecharter from non-operating ‘charter’ owning (or leasing) companies. Since the start of 2013, charter owners have accounted for 31 of the 66 contracts for ships of 18,000+ TEU (and 67 of the 137 boxships of 12,000+ TEU ordered). For a period after mid-2014 the orderbook of charter owned ships of 18,000+ TEU even surpassed the operators’ orderbook for these vessels. Four ‘charter owners’ alone have been responsible for ordering 25 units of 18,000+ TEU since start 2014.




Competitive Landscape
 Once delivered, these ‘mega’ boxships will account for a not insignificant portion of overall capacity (of today’s fleet and orderbook, they account for 7% of the world total). Their deployment will be focussed on the Far East-Europe route, where their perceived economies of scale can be best realised.

 This, combined with the need to fill these ships, is already driving severe freight market competition between operators on the Far East-Europe route. At the same time, these ships are bringing challenges to the rest of the container transportation chain, including the impact of acute volume peaks, putting pressure on port facilities but also potentially driving them to compete for the new business on offer.

A Brave New World?
So, in 1H 2015, the long expected next phase of ‘mega’ boxship orders finally arrived. This not only reflected carriers’ appetite to upsize, but also created opportunities for charter owners, some of them new to the scene. Moreover, whilst the recent wave of units ordered will not hit the fleet for some time, the arrival of the ‘mega’ boxships is already generating further competition within this already challenging business.
(Source: Clarksons)