For five years, Evergreen Line stayed on the sidelines as its rivals among the top 20 global ocean carriers swept up 10,000-TEU-plus vessels in a ship-ordering frenzy, racking up hundreds of millions of dollars in losses when the global downturn hit.
Now Evergreen is getting into the game. In what appears to be a well-timed agreement, the world’s sixth-largest carrier by fleet capacity will charter 10 fuel-efficient vessels with capacities of 13,800 20-foot equivalent units.
The Taiwanese carrier signed a memorandum of agreement to lease the ships from Korea Infrastructure Investments Asset Management, a subsidiary of Korea Development Bank. South Korea’s Hyundai Heavy Industries will build the ships, with deliveries set to begin in the fourth quarter of 2013.
The orders represent a turnaround of sorts for Evergreen. The carrier’s founder and chairman, Chang Yung-fa, has repeatedly stated his opposition to the giant ships other carriers have been adding in bunches. Chang cited the limitations on the ports that can handle the big ships and the difficulties carriers have in filling them.
Evergreen explained it sees the need to deploy ships to match the sizes of those operated by alliance partners. Like other carriers, Evergreen has stepped up its use of alliances to broaden coverage, increase sailing frequency and cut costs. Having similar-sized ships in joint services simplifies operations.
The new ships are expected to be deployed on Evergreen’s joint services between the Far East and northern Europe and the Mediterranean. When they are delivered, Evergreen said it would return chartered vessels to their owners as the leases expire.
Evergreen this month began individual cooperative arrangements with members of the CKYH alliance — Cosco, “K” Line, Yang Ming and Hanjin. The agreements will cover eight weekly services, four between Asia and North Europe and four between Asia and the Mediterranean.
Evergreen was the only top-tier line to hold off on new orders during the pre-recession boom, but is taking advantage of reduced shipyard prices to modernize its fleet. The newly announced charter deal follows recent orders for 30 new 8,800-TEU ships.
The carrier is the world’s sixth-largest vessel operator, with a fleet of more than 630,000 TEUs, according to research analyst Alphaliner.
Although Evergreen did not confirm the prices for the 13,800-TEU ships, they are reported to be about $115 million apiece, approximately 33 percent below the going rate for similar-sized ships a few years ago.
The new ships also are expected to burn about 30 percent less fuel than comparable-sized ships ordered just two years ago. The vessels will use hull designs and coatings, efficient engines and environmental features the Taiwanese carrier has been incorporating on all its new ships.
“In the face of increasing pressure brought by high oil prices on shipping companies, these new vessels will significantly enhance Evergreen Line’s competitiveness,” the company said.
Contact Joseph Bonney at email@example.com. Follow him on Twitter @josephbonney.