Hapag-Lloyd Orders 6 More 23,500-TEU Ships At Cost Of $852M

Hapag-Lloyd has doubled its container ship order, commissioning a South Korean shipyard to build six more mega-vessels.

Each of the container ships will have a capacity of more than 23,500 twenty-foot equivalent units (TEUs). That's the same size as the six ultra-large ships Hapag-Lloyd ordered at the end of 2020 from Daewoo Shipbuilding & Marine Engineering. 

The order does not come as a surprise. Hapag-Lloyd CEO Rolf Habben Jansen said on the ocean carrier's first-quarter earnings call that the orderbook was "unsustainably low" and that the company would be in the market for new container ships.  

"There is simply no slack in the global fleet," he said on the May call. "Scrapping has been at a ridiculously low rate. … When we look toward 2030 and 2035, a lot of ships will have to be replaced, and to be a little bit ahead of that curve I don't think is entirely wrong." 

Also in May, Hapag-Lloyd added 60,000 TEUs to the 150,000 standard and refrigerated boxes it ordered a month earlier to combat what it called "severe imbalances" caused by a shortage of containers around the world. 

The German shipping line said in Tuesday's announcement the new container ships will be outfitted with "a state-of-the-art high-pressure dual-fuel engine that will be extremely fuel-efficient. Their engines will operate on LNG but the vessels will also have sufficient tank capacity to operate on conventional fuel as an alternative. 

"Hapag-Lloyd is focusing on liquefied natural gas as a medium-term solution as it reduces CO2 emissions by around 15 to 25% and emissions of sulphur dioxide and particulate matter by more than 90%. Fossil LNG is currently the most promising fuel on the path towards zero emissions," it said. "The medium-term goal is to have ships that operate in a climate-neutral way using synthetic natural gas."

Hapag-Lloyd said the six ships are being financed for $852 million via a "syndicated green loan," which means the transaction was concluded in accordance with green loan principles of the Loan Market Association to fund environmentally friendly projects.  

"With this investment in the additional new buildings, we want to take another step in the ongoing modernization of our fleet in terms of both ship size and sustainability. At the same time, we want to meet the persistently high demand and reduce our slot costs," Habben Jansen said in a statement. 

Delivery of the newbuilds, which will be deployed on the Europe-Far East routes as part of THE Alliance, is expected to begin in 2024. Hapag-Lloyd is part of the space-sharing consortium with Yang Ming, HMM and ONE, which announced in December that it had signed a letter of intent with Shoei Kisen Kaisha Ltd. for a 15-year charter of six new ultra-large container ships each with a capacity greater than 24,000 TEUs. 

Hapag-Lloyd will take delivery of its six ultra-large container ships ordered in December in 2023.

Hapag-Lloyd said it currently has a fleet of 241 container ships with a total transport capacity of 1.7 million TEUs. 

Hapag-Lloyd raises box order to ‘counteract the container shortage'

Hapag-Lloyd shelling out more than half a billion dollars for containers

Hapag-Lloyd rakes in more in Q1 than all of 2020

Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

Image by WikimediaImages from Pixabay