More Ultra-Large Ships for ‘Mega’ Ocean Three Alliance - Global Trade Magazine
  September 10th, 2015 | Written by

More Ultra-Large Ships for ‘Mega’ Ocean Three Alliance

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  • The economic slowdown in Asia, especially China, is contributing to a 10 percent drop on the Asia-Europe trade route.
  • CSCL reported a 97 percent fall in first-half net profit compared with the same period in 2014.
  • The Ocean Three Alliance currently operates five weekly transpacific services to U.S. west coast ports.

China Shipping Container Lines Co. (CSCL) reportedly intends to buy 10 ultra-large ships for $1.5 billion to help the company to fulfill capacity commitments to the Ocean Three Alliance, which includes container carriers CMA CGM, and United Arab Shipping Co.
Shipyards Dalian Shipbuilding Industry, Shanghai Waigaoqiao Shipbuilding, and Hudong-Zhonghua Shipbuilding Group are potential candidates for the contract, to be announced at the end of this year.

The ships would be delivered in 2018 or 2019. The order would add to the estimated 30 percent capacity glut on the Asia-Europe trades, which is already causing rates to fall dramatically. The economic slowdown in Asia, especially China, is also contributing to a 10 percent drop on the trade route, according to The Wall Street Journal.

CSCL currently operates 18 ships that can carry more than 10,000 TEUs, including two that move 19,000 each. Last week it reported a 97 percent fall in first-half net profit to $1.7 million compared with the same period in 2014, when earnings were higher due to asset sales, the paper reported.

The so-called “mega” Ocean Three Alliance was formed in late 2014 and currently operates four weekly transpacific services to California ports and one service to the Pacific Northwest.

It also operates one service via the Suez Canal on the Asia-U.S. East Coast trade and a separate service dedicated to the Gulf of Mexico, as well as four weekly services on the Asia-Europe trade and four on the Asia-Mediterranean route.

News of CSCL’s fleet expansion plans comes as the shipping industry awaits news of the proposed merger of China Shipping and China Ocean Shipping Co. (COSCO), China’s largest state-owned ocean carriers, which, if combined, would hold an 8 percent share of the global container market. 

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