8 ships! This shipyard signed this year's

Amidst the significant cooling of the newbuilding market for container ships, a "small company" focusing on Asia-Pacific routes is expanding against the trend, signing the largest container ship order globally this year.

According to foreign media reports, TS Lines recently signed a letter of intent with Shanghai Waigaoqiao Shipbuilding to order 2+2 14000TEU and 2+2 8000TEU container ships. The price for a single 14000TEU container ship is US$145 million, and the price for a single 8000TEU container ship is US$89 million. Based on this calculation, the total cost of the eight new ships is approximately US$936 million (approximately RMB 6.77 billion).

For reference, Clarksons' data shows that the price of a new 7500/8500TEU container ship with traditional fuel is approximately US$94.5 million, a 4% increase compared to US$91 million in the same period last year; the price of a new 13000/13500TEU container ship with traditional fuel is approximately US$148.5 million, a 6% increase compared to US$142 million in the same period last year.

If this order is finalized, it will be the largest vessel in TS Lines' fleet and the company's first order for 10,000-TEU ships in its more than 20 years of operation.

It is understood that TS Lines was founded on March 2, 2021, and is a container shipping company focusing on the Asian region, mainly expanding its business in Asia. In recent years, TS Lines has continuously launched new ocean routes to expand its service network. In 2021, it expanded its trade routes to New Zealand and Canada, in 2022 to the UK, Netherlands, Germany, Belgium, and the US East Coast, and last year it opened routes to Indonesia and East Africa.

To date, TS Lines operates 49 routes and has a fleet of 45 vessels, including 35 self-owned vessels. TS Lines' fleet is mainly composed of feeder vessels, and its largest vessel, the only medium-sized vessel, is the 6 7000TEU container ships ordered from Waigaoqiao Shipbuilding in 2021 to celebrate its 20th anniversary. These are its first batch of medium- and long-haul vessels for the next 20 years.

These six 7000TEU container ships will all be delivered this year and put into operation on the China-India route, replacing the original 5000TEU container ships. It is expected that these new ships will play an important role in enhancing TS Lines' market competitiveness and providing customers with more advantageous services.

For Waigaoqiao Shipbuilding, TS Lines' latest order not only marks the second cooperation between the two parties after the 7000TEU series of ships but also means that Waigaoqiao Shipbuilding has once again undertaken an order for 10,000-TEU ships after many years. Clarksons' data shows that the last time Waigaoqiao Shipbuilding undertook an order for vessels of 10,000TEU or more was in September 2015, when COSCO Shipping Group ordered three 20,000TEU ultra-large container ships, which were delivered in 2018.

From 2015 to 2020, Waigaoqiao Shipbuilding mainly built large bulk carriers and tankers. Since 2021, medium-sized container ships have become the main ship type built by Waigaoqiao Shipbuilding. Between 2021 and 2023, Waigaoqiao Shipbuilding has undertaken a total of 34 7000TEU and 8 9200TEU medium-sized ships, taking a leading position in this ship type. To date, 20 7000TEU ships have been delivered and put into operation.

It is worth mentioning that TS Lines' latest order is also of great significance to the newbuilding market for container ships. Once finalized, it is expected to become the largest container ship order this year.

Since the beginning of this year, the number of new container ship orders has dropped significantly. According to Clarksons' statistics, the number of new container ship orders in the first four months of this year was only 29, far lower than 79 in the same period last year, while the number of new ship orders in 2021 and 2022 exceeded 200. Major container shipping companies such as Mediterranean Shipping Company and CMA CGM, which were once active in the newbuilding market in previous years, have temporarily slowed down their expansion of ship orders this year.

Meanwhile, in the container ship newbuilding orders so far this year, only ONE (Ocean Network Express) ordered 6 13000TEU methanol dual-fuel container ships each from Yangzijiang Shipbuilding and Jiangnan Shipyard in January this year. The rest are medium-sized ships from small and medium-sized shipping companies. Apart from ONE, among the top ten container shipping giants, only Evergreen Marine has recently been reported to have ordered 6 2400TEU methanol dual-fuel container ships from Huangpu Wenchong, but this order has not yet been officially signed.

In addition, ship brokerage company MB Shipbrokers (formerly Maersk Broker) also revealed that COSCO Shipping Group will order a series of dual-fuel 11000TEU container ships from Shanghai Waigaoqiao Shipbuilding. This order is in the final stages of finalization.

As container shipping rates have entered a downward cycle since the second half of 2023, and the record number of new ships delivered from the "order boom" of the past three years will further put pressure on future freight rates, the move by TS Lines, a relatively small shipping company, to expand its orders against the trend is undoubtedly quite rare. Alphaliner's latest data shows that TS Lines' current fleet capacity is 45 vessels with approximately 105,000 TEU, ranking 21st globally, with a market share of only 0.4%.

However, TS Lines has been in expansion mode in recent years, significantly increasing its new ship purchases. In addition to ordering 6 7000TEU medium-sized ships from Waigaoqiao Shipbuilding, it also ordered 8 1100TEU and 6 2900TEU container ships from Fujian Shipbuilding in 2021, and 1 1900TEU and 1 2600TEU container ship from Huangpu Wenchong. These feeder vessels have all been delivered and put into operation.

In addition to expanding its ship orders, TS Lines also submitted applications for listing on the main board of the Hong Kong Stock Exchange twice in October 2022 and April 2023.

Due to rising freight rates and the expansion of its fleet size, TS Lines' performance grew rapidly in the three years from 2020 to 2022, with revenues of approximately US$810 million, US$1.837 billion, and US$2.444 billion respectively, and maintained strong profitability. It is expected that by the end of this year, when the series of 7000TEU ships built by Waigaoqiao Shipbuilding are delivered, TS Lines' self-owned vessels will reach 41, with the proportion of self-owned vessels exceeding 90%.