Ordering 4 more of the world's largest car carriers! Government funding supports the national car and national transportation.

The market for car carriers is facing a severe shortage, with high demand and limited supply. To accelerate car exports, the South Korean government has taken the initiative to order more of the world's largest 10,800-car capacity dual-fuel car carriers.

Four more ships are being built for over $600 million! Hyundai Glovis and KOBC launch a new shipbuilding tender.

Recently, the South Korean Ministry of Oceans and Fisheries announced that it has signed a memorandum of understanding (MOU) with the Korea Ocean Business Corporation (KOBC) and Hyundai Glovis, the largest car transportation company in South Korea. KOBC will act as the ship owner and launch a tender for four 10,800-car capacity ultra-large car carriers, with a total value of approximately $612 million (approximately RMB 4.357 billion). Delivery is expected in 2027.

Minister of Oceans and Fisheries Kang Do-hyung, Hyundai Glovis representative Lee Kyu-bok, and KOBC president Kim Yang-soo attended the signing ceremony held at the Hyundai Glovis Pyeongtaek Port roll-on/roll-off car terminal.

According to the agreement, the two parties will prioritize allocating berths on these car carriers for cargo owners in situations where the Korean automotive industry is struggling to export due to insufficient capacity. This is conditional upon ensuring appropriate freight rates based on market conditions.

South Korean Minister of Oceans and Fisheries Kang Do-hyung stated that, given the situation in the Red Sea and the shortage of car carriers, this agreement is expected to alleviate difficulties in car delivery and transportation, thereby supporting South Korea's car exports.

Data shows that South Korean car exports have been steadily increasing over the past 19 months. In January of this year, South Korean car exports surged by 24.8% to $6.2 billion (approximately RMB 44.142 billion).

This agreement also marks the first instance of KOBC supporting the construction of new low-carbon vessels as the ship owner. The ships will be equipped with LNG dual-fuel propulsion systems and shore power facilities, enhancing their adaptability to stricter future marine environmental regulations.

The Korean industry believes that Hyundai Glovis' tender for four 10,800-car capacity ultra-large car carriers will help alleviate the global imbalance in supply and demand for car carriers and the shortage of transport capacity, while also positively impacting Hyundai Glovis' future competitiveness in maritime transport.

Hyundai Glovis plans to own a total of 28 LNG dual-fuel powered car carriers by September 2027, including the four car carriers from this tender. This is believed to be the largest such order in the global car carrier industry.

A Hyundai Glovis representative stated: “In a time of increasing uncertainty in the business environment due to geopolitical risks, continued policy support like this new shipbuilding order will be a driving force for the company to overcome challenges. Going forward, the company will also actively market to global cargo owners and lead the car carrier market.”

It is understood that Hyundai Glovis announced last year that it would invest in ordering 10,800-car capacity LNG dual-fuel car carriers. This type of vessel is the largest car carrier in the world to date, marking the first time that the transport capacity of a car carrier has exceeded 10,000 vehicles. This breaks the record set by the four 9,350-car capacity car carriers ordered by Wallenius Wilhelmsen from Nanjing Jinling Shipyard in October last year. Currently, the largest car carriers in operation are six 8,500-car capacity vessels built by Xiamen Shipbuilding Heavy Industry. Based on the compact cars commonly used in the global PCTC market, a single trip can carry at least 10,000 vehicles.

Two Chinese shipyards received orders for 20 ultra-large car carriers last year.

Including the latest order, Hyundai Glovis will have a total of 24 of the world's largest 10,800-car capacity car carriers.

According to an announcement by China Shipbuilding, the total value of the 12 confirmed new shipbuilding contracts is approximately $1.46 billion (approximately RMB 10.395 billion), accounting for 17% of the company's audited operating revenue in 2022. Based on this calculation, the cost of each new ship is approximately $122 million, and the total transaction value will reach $2.44 billion (approximately RMB 17.372 billion) after all optional orders are confirmed and take effect.

As the world's first ultra-large car carrier project exceeding 10,000 vehicles, this order from China Shipbuilding Group has milestone significance in the history of car carrier development. The ship design was provided by Shanghai Ship Design and Research Institute. It features fourteen car decks, five of which are lift or movable decks, providing excellent loading capacity for oversized and overweight roll-on/roll-off cargo. The multi-deck design is suitable for loading various new energy vehicles, including hydrogen fuel cell vehicles, compressed natural gas (CLNG) vehicles, and liquefied petroleum gas (LPG) vehicles. Some decks are suitable for carrying packaged dangerous goods and refrigerated containers, greatly enhancing the versatility and flexibility of cargo loading. In addition to using LNG dual-fuel, the series will also have ammonia fuel and methanol fuel pre-installation designs.

It is understood that these new Hyundai Glovis ships differ slightly from ordinary car carriers. While maintaining a beam of 38 meters, the overall length is increased from 200 meters to 230 meters, increasing the capacity by 1,000 vehicles to 10,800.

In recent years, car carriers have become one of the best-performing ship types. Clarkson's data shows that the one-year charter rate for 6,500-car capacity car carriers has risen steadily since the second half of 2020, reaching $115,000 per day, a more than tenfold increase from $10,000 in August 2020, and more than double the historical high of $52,500 in the second quarter of 2008. Currently, most vessels in the car carrier fleet have been chartered in advance, often for more than 3-4 years.

Driven by strong market demand, tight capacity, and potential fleet renewal needs due to environmental pressures, new orders for car carriers are rapidly increasing. According to Clarkson's data, new orders for car carriers totaled 39 in 2021, 74 in 2022, and 80 in 2023. Currently, the backlog of car carrier orders stands at 180 vessels, accounting for 35.61% of the existing fleet.

The vast majority of car carriers currently on order are being built by Chinese shipyards. Clarkson's data shows that nine of the top ten shipyards with the largest order backlogs are Chinese, namely Guangzhou Shipyard International (28 vessels), China Merchants Heavy Industry (Jiangsu) (28 vessels), CSSC Nanjing Jinling Shipyard (27 vessels), CIMC Raffles (17 vessels), Waigaoqiao Shipbuilding (16 vessels), Xiamen Shipbuilding Heavy Industry (9 vessels), Imabari Shipbuilding (9 vessels), China Merchants Industry Weihai Jinling (9 vessels), Mawei Shipbuilding (9 vessels), and Jiangnan Shipyard (7 vessels).