COSCO approves $1.5.b for new ships

THE China COSCO Holdings Company Limited has placed an order for construction of eleven 19,000 TEU (Twenty foot Equivalent Unit) container ships at compatriot shipbuilders worth a total of $ 1.5. billion.

According to world maritime News, the order has indicated the development and commitment of COSCO company to boost the economy in the maritime industry.

Under the deal, box ships will be built by Dalian Cosco KHI Ship engineering (DACKS) and Nantong Cosco KHI Ship Engineering (NACKS), Waigaoqiao Shipbuilding will be in charge of building three boxships, and the remaining two will be built by Dalian Shipbuilding Industry, COSCO said in a filing to Shanghai stock exchange.

COSCO added that it would finance the deal through the internal sources and bank loans.

The ultra-large container carriers (ULCC) are expected to be delivered in 2018 within the framework of the shipping company’s fleet renewal plan.

The company revealed that, the order was being agreed upon as early as April this year and it has been triggered by the growing pressure from the competition despite the overall overcapacity in the sector and declining freight rates.

COSCO is the latest shipping major to join the ULCC race that includes Maersk Line’s order for 11 container vessels with a capacity of 19,630 TEU each at Daewoo Shipbuilding & Marine Engineering (DSME), OOCL’s order for six mega containerships that will feature 21,100 TEU units.

According to the builder, South Korean Samsung Heavy Industries (SHI), along with Japanese Mitsui O.S.K. Lines, Ltd. which has six 20, 000 TEU boxhips on order and French liner company CMA CGM which has ordered three 20,600 TEU boxships at Hanjin Heavy Industries.