X-Press Feeders green demand gamble on methanol fuelled ships

X-Press Feeders’ COO Francis Goh told Seatrade Maritime News the company ordered its first tranche of eight vessels in 2021, speculatively, without having any discussions with its deepsea customers who would be required to pay an inflated price for freight.

“We took a bit of a chance, but it was also a step that we were willing to take to achieve our own net zero targets,” explained Goh, who added, “The good thing was that customers were willing to participate, and our four ships [operating on two intra-Europe services] are operating at 85-90% utilisation rates.”

Green methanol as a fuel is on average three to four times more expansive than conventional fuels. However, this increase in fuel cost does not translate to three to four times increase in service cost. Goh explained thar fuel is just one component of the entire shipping operations and this higher cost is spread across the different components.

According to Goh new vessels will be significantly more fuel efficient and as this phase of the company’s newbuilding programme comes to a close, the COO said that the average age of 70% of its fleet will be under four-years-old.

He explained that the vessels are designed with dual fuel main engines, but the auxiliaries are conventionally powered, and will burn MGO, when manoeuvring, reducing the carbon savings to 65% in an operational context.

Related:X-Press Feeders launches green methanol feeder network

“These services are still considered ‘green’,” said Goh, “Anything over 60% in carbon savings is considered green.”

Five of the methanol 1,260 teu ships have been delivered in the last year, three more will arrive by the end of this year and a further six next year. “So that by the time we reach the first quarter of 2026 all of the methanol vessels will have been delivered,” agreed Goh.

Fuel for the methanol fleet is provided by OCI Global in the US, though the methanol unit was sold earlier this month in a $2 billion deal with Methanex. The company supplies methanol from biomass and Goh confirms that the company will not have sufficient fuel to operate all of the ships on methanol, immediately.

This is not because of production issues, explains Goh, but rather because the company is still in discussions with clients.

“This is still a very new development, where our clients [the deepsea carriers] and also their clients are taking a bit of time to get on to offering green transportation to their clients. This is a step forward and now that we have launched our two green services, we want to take a breather and then just start discussing with our clients next year's plans,” said Goh.

Related:X-Press Feeders launches second green methanol-powered route

Crewing has also been raised as an issue with new fuels needing training for bunkering and storage operations and X-Press Feeders developed a plan to train seafarers.

“We first tapped into some experienced crew who have worked on methanol tankers. I mean methanol is not a new commodity, many industries use methanol, so tankers carry methanol around. These crews are well versed with handling methanol on ships, so we first brought in experienced crew and then we have got them to conduct training,” said Goh.

The carrier has also enlisted help from classification societies on crew training and the protocols that are required. By the time the company has taken delivery of its full complement of dual fuel ships it will have a range of crew ready to handle the fuel safely.

Training crews is another example of X-Press Feeders’ proactive approach to meeting its decarbonisation targets.

That approach was given clarity by Goh: “We're not going to sit down and wait for customers to pay for our net zero targets. No, we need to stand for something ourselves. And, we're willing to do that, which is why we placed an order for eight ships back in 2021, about three years ago, without a guaranteed customer.”