Asia-Europe to take hit as Cosco places mega ship order

After months of rumours, there is increasing confirmation that the major Chinese shipping group Cosco is planning to add mega-ships to it container carrier fleet.

Cosco has reportedly ordered nine 20,000-teu ships, with an option for four additional vessels of the same size, according to several news media.

The container ships will be built at three different Chinese shipyards: Shanghai Waigaogiao Shipbuilding (SWS), Nantong Cosco KHI Ship Engineering (NACKS) and at Dalian Shipbuilding Industry Co.

The ultra-large container ship newbuilding order comes just days after Maersk Line ordered 11 similarly-sized vessels of 19,630-teu each.

That order came after CMA CGM confirmed it had ordered six 14,000-teu ships, which came weeks after OOCL ordered six 21,000-teu container carriers.

Hapag-Lloyd is also now rumoured to be on the verge of placing an order for several ULCSs, but there is no word yet on the capacity for these newbuilds.

The spate of new orders puts further pressure on the already strained rates on the flagship Asia-Europe service, which is currently suffering from record low freight rates as shipping lines wage war with one another in an attempt to secure volume and retain market share.

In the period from May to late 2015, 630,000 new teu has been ordered in newbuilds of vessels of 10,000-teu or above, with the same level of newbuildings set for delivery in 2016 and 2017, according to a report from Drewry in late May.

And the orderbooks for 2018 and 2019 are also being filled, with the Cosco order representing the latest addition.

Drewry has forecast that all newbuildings of 14,000-teu or above, representing a combined capacity of 503,000-teu to be delivered in the remainder of 2015, will be deployed on the Asia-Europe route.