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Maersk Lilne Orders 10 Container Ships With Option To Buy More

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http://www.nytimes.com/2011/02/22/business/global/22ship-maersk.html?ref=business

Betting on a continued rebound in global trade, Maersk Line said Monday that it had agreed to buy up to 30 giant container ships from Daewoo Shipbuilding & Marine Engineering of South Korea, in a deal that could be worth $5.7 billion.

Maersk, the world’s biggest container line, said it had signed a contract to buy 10 “Triple-E” vessels, which would be the largest container ships plying the seas. It has an option to buy 20 more.

The vessels will have a capacity of 18,000 20-foot equivalent units, or T.E.U.’s, and will be delivered from 2013 to 2015. They will have 16 percent more capacity than the company’s largest existing vessels, known as PS-class ships.

Peter Rothausen, an analyst at Danske Markets in Copenhagen, said the order represented a sign of confidence in the turnaround in shipping last year, even as Maersk’s competitors remained cautious for now.

From 2005 to 2008, shipyards were humming, building ever larger ships as ports expanded and new services opened. But the financial crisis and the ensuing decline in trade, as well as the removal of easy financing, pushed many liners close to the brink in 2009, leading them to scrap vessels, conduct “slow steaming” — operating ships at reduced speeds — or leave ships idle.

Late last year, Gianluigi Aponte, the owner of the giant Mediterranean Shipping Co., Maersk’s main rival, said the cargo business had come back from the deep trough. But he said that he did not plan to add to his 417 cargo vessels beyond orders currently being built.

The order will help Maersk improve profit margins on routes between Asia and Europe, the most important in world trade. It expects 5 percent to 8 percent annual growth in trade on those routes to 2015.

“Should we decide to go for all 30 vessels, it is going to be close to $6 billion, and that will make it the largest order ever seen in shipping,” Maersk Line’s chief executive, Eivind Kolding, said. He added there was a 50 percent chance that Maersk would exercise its option for an additional 10 ships, but it was a “long shot” that it would buy the final 10.

The Triple-E vessels will be 400 meters long, or about 1,310 feet, 59 meters wide and 73 meters tall. Maersk said they would produce 50 percent less carbon dioxide per container moved than the industry average for the Asia–Europe routes, a result of design improvements and lower fuel consumption.

Replacing older ships in the fleet? Aren't there masses of these ships outside some ports? Will more efficient ships steal trade form other companies?

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I guess these would be too large to transit the Suez Canal so maybe they aren't banking on that in the near future.

The suez is 60meters wide, these ships are 59meters. It looks like they are as large as can be while still using the Suez Canal.

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Consolidation.

Yes.

Yes.

Even though global growth is inevitable, the majority of it wont be seen in the UK as the UK has pulled over onto the hard shoulder for a while. :) Besides these ships dont come online until a few years down the road so its not so much a sign of growth as more a case of seeking efficiency gains from fleet consolidation.

And an inflation hedge.

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Besides these ships dont come online until a few years down the road so its not so much a sign of growth as more a case of seeking efficiency gains from fleet consolidation.

Presumably it's a sign that Maersk expects the recovery to be in full swing - and specifically, that Europe and the US will be back to importing Chinese consumer crud by the very large boatload - by the middle of 2013.

Edited by The Ayatollah Buggeri

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Something to keep in mind is the world economy is powering forward. I think world gdp growth is at about 4% right now. China alone is about 10% of the global economy and is growing at ~10%. Well that is 1% world growth by itself.

There is something basically unthinkable 10 years ago.. huge south-south trade. Look at the middle east and east Asian trade. Or India and African trade. Or China - Brazil.

If you say the world economy will grow at 3% a year over the next 10 years.. which I think is conservative.. then in 2020 the wold economy will be 34% larger in 2020. And all else being equal world trade would be 34% larger.

Maersk as the world's largest shipping company wants a big piece of that growth wherever it is.

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The suez is 60meters wide, these ships are 59meters. It looks like they are as large as can be while still using the Suez Canal.

http://en.wikipedia.org/wiki/Suezmax

According to that the Suez can accomodate vessels up to 77.5m wide.....but only up to 68m tall. Maybe the article quotes the draft + height above water of the new ships to make it sound more impressive. I can't see why Maersk would be foolish enough to order ships that can't fit through the Suez Canal if they're planning on using them for Asia to Eurpoe trade.

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http://www.telegraph.co.uk/finance/newsbysector/transport/10162144/Maersk-brings-worlds-largest-ship-into-service.html

The company has taken delivery of the first of 10 massive "Triple E" container ships each measuring 1,312ft long and capable of holding more than 18,000 standard 20ft shipping containers.

Capable of carrying 16pc more cargo than Maersk's largest vessel currently plying the oceans, the Triple E class was designed to cut costs through economies of scale.

However, the new ship - named Maersk Mc-Kinney Møller - might not deliver those cost savings just yet as several of the just 16 ports certified to handle such a huge vessel have the facilities to its full capacity.

With the Triple E class standing 20 storeys high, not all of these ports have cranes high enough to fully load the vessel.

Genius!

So currently the ship may deliver no savings if it can't be fully loaded?

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http://www.telegraph.co.uk/finance/newsbysector/transport/10162144/Maersk-brings-worlds-largest-ship-into-service.html

Genius!

So currently the ship may deliver no savings if it can't be fully loaded?

Biggest shipping line, biggest ships, Economies of scale and they will drive more ports to adapt with them. The biggest ports likewise, the less ship turarounds they have to do then less empty dock time so they will accommodate them. All about the money (costs).

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http://en.wikipedia.org/wiki/Suezmax

According to that the Suez can accomodate vessels up to 77.5m wide.....but only up to 68m tall. Maybe the article quotes the draft + height above water of the new ships to make it sound more impressive. I can't see why Maersk would be foolish enough to order ships that can't fit through the Suez Canal if they're planning on using them for Asia to Eurpoe trade.

The triple E is will be using suez. The rationale for bigger ships is that its more economical to move cargo in bigger ships going slower since fuel usage per mile rises with increased speed.

Edited by goldbug9999

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Maersk clearly aren't big into their charts.

http://www.bloomberg.com/quote/BDIY:IND/chart

BDI was 9230 in 2008,currently 1103.

Seems more likely they're just buying more efficient ships than taking a punt on the good days returning-but I'm no expert on shipping.

My guess is that it is a win for them whatever. They probably don't take decisions on commissioning these sorts of things on a 4 year timescale. The boats will probably be in operation for decades.

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Could go wider - maximum beam 254ft 3 inches (78m) according to the Suez Canal authority

Obviously you do not want to bang into the sides of it and dent the land, even if you are Greek, and registered in Panama. :huh:

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  • 312 Brexit, House prices and Summer 2020

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