Deal for 30 container ships shows confidence in China, says Maersk

PUBLISHED : Tuesday, 22 February, 2011, 12:00am
UPDATED : Tuesday, 22 February, 2011, 12:00am

Moves by Maersk to spend up to US$5.7 billion buying 30 container ships capable of carrying 18,000 teu (20-foot equivalent units) reflect continued confidence in China's export and import markets and trade growth in general, executives say.

Tim Smith, chief executive for Maersk Line North Asia, said yesterday the triple E-class ships were set to call at five ports in China - Hong Kong, Yantian, Shanghai, Xiamen and Ningbo - serving the Asia-Europe trade.

Container volumes were expected to grow by 5 to 8 per cent per year up to 2015 between Asia and Europe. These ports would be able to handle the new ships despite them being longer and wider than existing container ships. But they would be too big to enter some US ports.

Soren Karas, head of South China for Maersk Line, said container volumes usually grew two or three times the level of gross domestic product. If the mainland economy did slow it would come from a high base level.

'Even if the mainland slows a bit, there is robust potential for 5 to 8 per cent growth we expect for trade.'

Smith said overall the growth in container volume would improve as the year progressed, so an 8 per cent growth forecast could be quite conservative. 'If world trade picks up a bit, there could be capacity constraints next year,' he said. This could be similar to the bottlenecks that occurred in the first quarter last year when a shortage of containers and ship capacity led to cargo being left on docks in China and elsewhere.

Maersk will take delivery of the first of the 18,000-teu ships from South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering in the second half of 2013. The Danish shipping giant has signed an order for 10 vessels priced at US$190 million each. Smith said the company also had options for a further 20 vessels.

At about 400 metres long, they will be the biggest container ships afloat, but Smith said they would also be the most efficient and environmentally friendly.

The vessels would cut the cost of shipping a container from Asia to Europe by 26 per cent compared with existing vessels on the route. Using the latest hull design and engine technology, the ships would slash carbon dioxide emissions by 50 per cent.

The ships will also have a 'green passport' so that 90 per cent of the components, including high-grade steel and copper, will be capable of being recycled at the end of the vessel's life of about 25 years.

'They will be good for the world. They will be so much better than any other container ship ever built,' Smith said.