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Cosco set to join the mega-boxship fray with order for 10 new vessels

Cosco set to join the mega-boxship fray with order for 10 new vessels
Yet another Chinese line has joined the megaboxship fray with the Wall Street Journal reporting that China Cosco Holdings is set to order at least ten 19,000-teu vessels in an order worth about $1.4bn and which will be going to a Chinese yard.

“Cosco is in the final process of choosing among five Chinese yards and we may get the firm order by the end of May,” one source was quoted as saying. “The ships will be deployed in the Asia-to-Europe trade loop.”

While Cosco had so far stayed away from the mega-boxship ordering frenzy, the alliance structure of modern liner shipping and the economics of the Asia-Europe trade lane have apparently forced them to reconsider.T

heir bigger competitors such as Maersk Line Mediterranean Shipping Co (MSC) in the 2M alliance already have these megaships in their fleets while Evergreen, a partner in Cosco's CKYHE alliance placed an order earlier this year. Meanwhile the other major alliance Ocean Three, which groups CMA CGM, rival Chinese line China Shipping Container Lines and United Arab Shipping Co all have ultra large containerships either already running or on order.

In addition, Orient Overseas Container Lines, a leading member of the G6 alliance last week also placed an order for six 21,100-teu vessels.“They had and still have concerns on whether they will be able to fill them,” a source said. “But megaships are imperative if you are to compete going forward.”

“Cosco is part of one of the world’s biggest shipping alliances,” Lars Jensen, SeaIntel Maritime Analysis ceo was quoted as saying. “If this alliance is to build its network and stay in the game against other, bigger groupings, then there is no choice but to run this kind of vessel.”