OOCL ramps up 8,000-TEU fleet

OOCL ramps up 8,000-TEU fleet

Orient Overseas Container Line Ltd., the dominant Hong Kong carrier, is expected to sign contracts totaling about $160 million for two more 8,000-TEU ships, the largest container types now in service.

The order will bring to 10 the number of similar-sized vessels either delivered to or on order for OOCL.

The vessels will be constructed by South Korea's Samsung Heavy Industries. Four will be delivered next year followed by two in 2005-06.

The SX-type vessels will be deployed on either trans-Pacific or Asia-Europe trades, a senior OOCL executive said. He dismissed concerns about over-capacity. "When OOCL Shenzhen first came on with 8,000 TEUs, we filled it without a hitch. So we are in tune with the demand. If you look at the OOCL fleet only, it is not very meaningful. But if you look at the Grand Alliance pool of a little over 100 ships, then the overall deployment is meaningful."

The Grand Alliance, formed in late 1997, comprises OOCL, Malaysia International Shipping Corp., P&O Nedlloyd, Hapag-Lloyd and NYK Line.

"The Grand Alliance takes a long-term look where future deployment is considered," the executive said. "We do what we call a cascade deployment, where larger ships will come into replace the second-largest, the second-largest ship then moves down to the third tier and so on depending on market growth. This ensures a smooth transition of capacity and meets customers' needs."

Lines have also seen growing demand for vessels of 1,000 TEUs, meaning a need for new capacity.

OOCL itself aims for a mix of ships with capacity of 5,000 TEUs and 8,000 TEUs, supported by smaller types for intra-Asian and trans-Atlantic services.