Chinese line joins the Triple-E brigade

China’s shipping and port major, Cosco, is to order at least 10 container megaships, according to the Wall Street Journal.

These Triple-E class vessels, with a capacity of 19 000 TEUs, are to be built by a Chinese shipbuilder at a total cost of the equivalent of R16.8 billion.

Cosco is the main carrier in the CKYHE alliance, along with Taiwan lines Evergreen and Yang Ming; Japan’s K-Line; and South Korea’s Hanjin Shipping.

Adding to the number of Triple-Es taking to the seas, Evergreen ordered 11 in January and Maersk’s CE, Søren Skou, recently told the Journal they would be ordering 11 new Triple-E’s this year, added to the 18 already owned.

This megaship buying frenzy is set to boost the already prevalent overcapacity on the east-west trades, with the result of further depressed rates.

This capacity supply/demand problem is already noticeable, with the rate last week for container movement from China to Northern Europe falling US$75 to US$511. This sees rates at their lowest since mid-2013, and about half what they were at the beginning of this year.

According to the Journal, analysts estimate that capacity in container shipping is at least 15% above demand.