Another order cancellation from the ship owner? Four container ship orders cancelled at this shipyard

2023-01-31 09:00

A wave of order cancellations in the container ship sector seems to be beginning. A newly established "new shipowner," HR Lines, has decided to "temporarily" abandon the construction project of four container ships at Mawei Shipbuilding, and instead expand its fleet by acquiring second-hand vessels.

It is understood that HR Lines, a feeder container shipping company in Bangladesh, ordered four 2900TEU feeder container ships from Mawei Shipbuilding in the second half of 2021, with a contract value of US$152 million (approximately RMB 1.031 billion). These four new ships were scheduled for delivery between the end of 2023 and mid-2024; however, according to the latest news from TradeWinds, this deal did not materialize.

Hamdan Hossain Chowdhury, Managing Director of Karnaphuli Group, to which HR Lines belongs, confirmed that the order from Mawei Shipbuilding has not yet taken effect, "We haven't abandoned it, but rather suspended the construction of the new ships."

He explained that there are two main reasons for abandoning the order. Firstly, the main port, Chittagong, is undergoing a large-scale infrastructure upgrade, expected to be completed around 2026. The new terminal will almost double the berthing capacity of reliable vessels; therefore, building new ships based on the current port infrastructure is not a wise business decision.

In addition, with the emergence of green alternative fuels, we are still waiting to see which fuel system makes the most sense in terms of regulation, commerce, and practicality.

According to International Ship Network, HR Lines belongs to the Karnaphuli Group, founded by Hedayat Hossain Chowdhury in 1954. The group's business covers ports, shipping, media, healthcare, real estate, retail, and insurance/finance. HR Lines was established in March 2020 to meet the liner shipping service needs of Bangladesh's imports and exports. Before this, the Karnaphuli Group conducted container shipping business through its agency companies operating in Bangladesh.

Shortly after its establishment, HR Lines acquired two 1550TEU container ships, "HR Sahare" (formerly "Kota Wajar") and "HR Sarera" (formerly "Kota Waris"), from PIL (Pacific International Lines) in Singapore, and launched a liner service to and from Bangladesh in July 2020. Subsequently, the company acquired four more ships from PIL: the 1550TEU "HR Arai" (formerly "Kota Wangsa") and "HR Farha" (formerly "Kota Wangi"), built in 1996, and the 1454TEU "HR Rhea" (formerly "Kota Anggerik") and "HR Hera" (formerly "Kota Arif"), built in 1999.

At the beginning of this year, HR Lines acquired the 1068TEU "Maersk Arun" (built in 1999) from Maersk and the 1628TEU "SITC Bangkok" (built in 2003) from SITC. The "Maersk Arun" will be renamed "HR Turag," and the "SITC Bangkok" will be renamed "HR Balu." With the addition of these two latest vessels, the company's fleet comprises eight feeder vessels with a total capacity of 11,840 TEU.

HR Lines stated: "We plan to acquire more vessels this year, which will help further strengthen and upgrade our feeder services, connecting Chittagong with major transshipment hubs in Colombo, Singapore, and Port Klang."

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