Weeks after completing its initial stock offering, Zim announced that it is making a long-term strategic move designed to increase its operations on its Pacific routes and advance its sustainability position. Zim and Seaspan agreed to a long-term charter for the construction of 10 new containerships that are also part of a new growth initiative by Seaspan to capture the opportunities in container shipping.
Seaspan has contracted with Samsung Heavy Industries for the construction of 10 dual-fuel liquefied natural gas (LNG) containerships, which will be its first investment in LNG-powered vessels. The ultra-modern containerships, which will have a capacity of 15,000 TEUs, are anticipated to begin delivery in the first half of 2023, and upon completion, Seaspan will enter 12-year charters with Zim.
Zim plans to deploy the vessels in its Asia – US East Coast trade. Citing data from the market intelligence provider, PIERS, Zim says it has an estimated nine percent market share on this route and will use the new ships to both increase its capacity and market share.
The agreement represents a significant move by Zim to expand its operations, including with vessels that will be among the largest in its fleet. The long-term nature of the agreement is also different for Zim which highlighted in its stock offering its flexibility with currently nearly 80 percent of its fleet under leases having a remaining charter duration of one year or less.
The order is the latest in a series of moves by Seaspan which has now committed to a nearly 25 percent increase in the capacity of its containership fleet. As of September 30, 2020, Seaspan’s global fleet consisted of 127 vessels and approximately 1,073,000 TEU. Since December 2020, Seaspan has announced agreements for the construction of a total of 17 new boxships, including the 10 for Zim. The new ships will add 259,000 TEU in capacity to Seaspan’s fleet.
While Seaspan says its focus is on the more versatile mid-sized category of between 9,000 to 15,000 TEU capacity, the company also made news this week ordering two of the world’s largest containerships. The company said it had ordered two 24,000 TEU conventional fuel newbuild container ships from an unnamed shipyard with anticipated deliveries beginning in the first half of 2023. Seaspan said they had entered into an agreement for 18-year charters with “a leading global liner customer,” which is widely believed to be MSC.
In December 2020, Seaspan also announced that had entered into an agreement to build five 12,200 TEU containerships. Those ships are reportedly for a long-term customer and will operate under 18-year charters with purchase obligations at the conclusion of the charters.
“By combining our key core competencies of creative partnerships, quality growth and disciplined capital allocation, we have developed compelling newbuild opportunities to continue to fuel the company’s growth and enhance our competitive advantages,” said Bing Chen, Chairman, President, and CEO of Seaspan. “With newbuild slots scarce in today’s market, we have been consistently meeting our liner customers’ needs while maintaining our return discipline and prudent capital allocation.”
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