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SCMP Reporter

Canada's Seaspan prepares to fulfil its chartering commitments made earlier in the year to China's No2 carrier

The final piece to the deal that will be China Shipping Container Line's (CSCL) biggest charter programme for Panamax-size vessels should be in place next month.

Vancouver-based Seaspan Container Lines is close to confirming a US$380 million option for nine 4,250-teu (20-ft equivalent unit) container ships with South Korea's Samsung Heavy Industries to fulfil chartering commitments to CSCL signed earlier this year.

The order is expected to be firmed up next month in a shipbuilding deal that will ultimately represent the mainland's No2 carrier's largest intake of vessels capable of transiting the Panama Canal.

The order from Seaspan, a Canadian firm with close family ties to a top CSCL executive, is the option part of a deal for five sister ships being delivered for long-term charter to CSCL in 2005.

The 14 ships will form the backbone of CSCL's second-string networks on the transpacific and Asia-Europe trades, with deliveries scheduled until late 2006.

'Seaspan has options to build the nine ships, and we expect that the company will confirm the contracts very shortly. However, until now, they remain only as options,' a shipyard source said.

To get greater rate-setting flexibility on the transpacific, the state-owned carrier last week followed Sinotrans' lead by applying to the United States Federal Maritime Commission for exemption from 'controlled carrier' status.

If approved, CSCL will be able to change the prices it charges customers to carry cargo on the trades in 24 hours, rather than the mandatory 30-day waiting period it must now endure.

Seaspan and Samsung have worked together on several container-ship newbuilding projects in recent years.

In January, the Canadian company sealed an order for five 8,100-teu vessels for charter to CSCL in 2005.

There was talk last year that Seaspan and French carrier CMA CGM would order 9,600-teu vessels from Samsung, but the project was shelved when demand for capacity in the container-shipping market waned later in the year.

Commenting on whether that contract could now be renewed in a revitalised market, the shipyard source said: 'There are no talks going right now over this size of vessels to be built by Samsung, but we understand other Korean yards are close to deals for vessels in the 9,000-teu range.'

South Korea's largest shipyard, Hyundai Heavy Industries, confirmed at the weekend it would build eight 8,100-teu vessels for CMA CGM for delivery in 2006.

CMA CGM and Hyundai signed a contract in June to build four similar-sized ships, and the carrier was pursuing French government financing approval before signing a contract for another four vessels of the same size.

With financing approved at the beginning of the month, the eight vessels are scheduled for delivery in 2006 and will be deployed on the carrier's French Asia Line service, where they will replace 6,750-teu vessels.

CMA CGM's order book for post-Panamax vessels had been the subject of some confusion since the first quarter when it agreed to a joint-venture service on the transpacific trades with Switzerland's Mediterranean Shipping Co (MSC).

From next year until 2006, CMA CGM will take delivery of nine 8,100-teu vessels from Hyundai. Eight of them will enter service on the carrier's French Asia Line.

The others are expected to form part of a five-ship deployment on the transpacific trades with MSC.

CMA CGM will also take three more sister ships next year on long-term charter from German shipowner Conti Reederei, which it will deploy on the same joint-venture service with MSC.

CMA CGM earlier this year sold an 8,100-teu vessel to MSC, also on order at Hyundai and for deployment on the same transpacific service.

CMA CGM is the largest proponent of container ships exceeding 8,000 teu, with confirmed contracts for 13 vessels.

Paul Richardson's e-mail address is prnewsservice@btclick.com

Cargo News

Seaspan is close to confirming a US$380 million option for nine container ships

Together with the deal for five sister ships, the vessels will form the backbone of CSCL's second-string networks on the transpacific and Asia-Europe trades, with deliveries scheduled until 2006



CSCL close to Panamax vessel deal