Taiwan’s Evergreen to spend up to US$1.6 billion on 10 supersized cargo ships, to be built in China and South Korea

Taiwan-based shipping line Evergreen has announced plans to buy 10 of the biggest cargo vessels on the planet, which will be built at shipyards in South Korea and China.

The enormous order will cost Evergreen anywhere between US$1.4 billion and US$1.6 billion, according to estimates, and could see it move up a place in a league table ranking cargo lines by capacity. It is even likely to dash hopes in the industry that demand was finally catching up with an oversupply that has blighted the market for years, analysts said.

The first of the giant ships, which will have capacity of 23,000 twenty-foot equivalent units (TEUs), is likely to enter service in 12 to 18 months’ time, said Peter Sand, chief shipping analyst at BIMCO, the world’s largest shipping association.

Evergreen declined to explain the move but it comes at a time shipping companies are increasingly shifting towards supersized vessels.

Han Ning, director of Drewry Maritime Advisors, said Evergreen’s relatively small and ageing fleet was in need of an upgrade.

Evergreen announced it had placed the orders on September 10, and the Hong Kong office confirmed the news on Thursday but declined to comment further. It represents an updated version of a previous plan announced just a month ago to build six ships and charter five.

Six of the waterborne behemoths will be built at Samsung Heavy Industries shipyard in Korea, two will be built at the Jiangnan Shipyard and two at Hudong-Zhonghua Shipbuilding, a subsidiary of the China State Shipbuilding Corporation that builds navy ships for the Chinese military. Each ship is estimated to cost between US$140 million and US$160 million.

Shipping lines have faced a decade of meagre returns thanks to overcapacity and the fallout from the global financial crisis.