The Weekly Containershipping-Newsletter by Jan Svendsen and Jan Tiedemann. July 2006, 28 th week

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1 July 2006, 28 th week Emirates Shipping Line plan new service +++ Hatsu Smiles at Hamburg +++ Hapag- Lloyd adds African Loop +++ New Deckhouse for L Who will operate Port 2000 remaining berths? +++ MSC Upgrades Lion Express +++ The Closest City to Asia +++ MSC Fleet Update +++ More orders for a non-existent shipyard Emirates Shipping Line plan new service Emirates Shipping Line (ESL), lead by former Norasia CEO Vikas Khan, today run their first service between Asia and the North American East Coast. The new venture that only very recently took up operations already plans on its expansion. Reportedly, the company has fixed six 3,000 TEU ships, to be employed on a new service linking Asia with ports in India and the Middle East. Similar to ESL s first service the company would prefer to jointly run the new sling with a partner who brings in at least one ship. The final port rotation is not yet clear. ESL are still in negotiations with a number of competing ports and port operators. We expect more information to be available, soon.

2 Hatsu Smiles at Hamburg One of Hatsu s latest fleet additions recently premiered at Hamburg s Burchardkai Terminal. The 7,024 TEU Hatsu Smile arrived on July 1 st, early in the morning. She was built by Japan s Mitsubishi Heavy Industries of Kobe. The new ship is m long, 42.80m wide and displaces up to tons. Hatsu Smile is employed in the Evergreen Group s U.S. West Coast-Asia-Europe Pendulum (WAE). Hatsu Smile arrives at Hamburg for the first time, while Coscon s Wanhe pulls out seaward on the river Elbe. Photo: Jan Tiedemann Hapag-Lloyd adds African Loop Hamburg-based container Carrier Hapag-Lloyd, a company that traditionally focuses on East-West services, will be expanding its service network by starting a service between Northern Europe and South Africa in autumn. The company considers southern and western Africa an attractive market for container transport with considerable potential. Four ships capable of carrying 1,700 TEU each (including 200 reefer boxes) will be deployed in the new fortnightly loop, aptly named South Africa

3 Express (SAX). The service s port rotation will be Hamburg, Antwerp, Le Havre, Lisbon, Cape Town, Port Elizabeth, Durban, Cape Town, Dakar, Lisbon, Thamesport. The service s first departure from Hamburg will be on October 15 th. Apart from direct calls, Tema, Abidjan and Lagos will be served via transhipment in Dakar - already a port of call in Hapag-Lloyd s Europe-South America (EC) service. New Deckhouse for L-203 When the photographs of the fire at Odense Steel Shipyard hit the news some weeks ago, it seemed quite clear that the damages caused would delay the delivery of Maersk s first Super jumbo (L-203) by quite some while. However, the shipyard recently announced that the vessel will only be about four weeks late. This is Matador 3 in the Kiel Canal. Towed by tug Asterix, the giant floating crane is underway towards A.P. Møller s Odense shipyard. Photo: Willy Thiel The fire heavily damaged the new ship s superstructure but left all engine spaces intact. It will therefore be possible to remove the entire deckhouse and replace it with the one originally

4 destined for the next ship, yard number L-204. That deckhouse has already been completed by Baltija Shipyard in Klaipeda (Lithuania) and will be shipped to Odense soon. The yard s biggest challenge now, is to quickly find adequate crane capacity to lift the old and new deckhouses off and onto the vessel s hull: The yard s own 1,500t-crane cannot be used as it only straddles the yards giant building dock, already occupied by the hull of L-204. The damaged deckhouse is considered beyond repair and will most likely be scrapped altogether. According to Maersk Line s schedule, L-203 will now be phased into the AE1 service at Gothenburg on September 14 th. Who will operate Port 2000 remaining berths? Early last week, the port of Le Havre confirmed to be in le negotiations with several container carriers regarding the right to operate the remaining berths of the Port2000 development project. Authorities state, that shipping companies would be preferred over mere terminal operating companies, because of their ability to start new services themselves and thus attract volumes to Le Havre. Currently the port is discussions with a handful of international shipping lines, including a Taiwanese and a Chinese carriers. Furthermore one of the business major alliances is in talks with le Havre, too. Port2000, when finished, offers a total of twelve berths. The annual capacity lies in the region of half a million TEU per berth and year. Today, CMA CGM and Maersk already have three dedicated berths each in the new port. Last year, about 2.2 million TEU have been moved at Port MSC Upgrades Lion Express Changes to service patterns and the exchange of vessels are a daily routine in the container trade. However, MSC s plans for the Lion Express are rather noteworthy, since they represent a massive upgrade of that sling. Traditionally, MSC is very strong between China and Northern Europe, but now the company s well-known Lion Service also includes a call at Hakata, Japan. This is MSC s first ever direct link between Japan and Europe. With Hakata, the Swiss carrier has chosen one of the lesserknown container ports: Hakata is located in the Fukuoka province on the northern shores of Kyushu island. It is a very

5 old port with traditionally strong connections to China. The first trial call at Hakata was made by brand new MSC Charleston at the end of May. Before the vessel left Asia for Europe, she visited Kashi Park terminal in Hakata s northern port. Her trial call made MSC Charleston the biggest ever containership to visit Hakata. Some sources suggest that there will also be changes to the loop s European end and the call at Bremerhaven will be dropped from August. However, MSC s schedule still lists departures from Bremerhaven through August and September, so we have no reason to believe this is true. Nevertheless, one wonders how the ships are supposed to make up for the extra steaming and berthing time: The introduction of the Hakata call results in a deviation of more than 500 nautical miles off the present course and will add up to two days of transit time to the Lion service. That is, unless MSC actually drops some other port of call in favour of Hakata. Apart from modifications to the port rotation, the Lion Service will also see some new ships: MSC Rania will follow Charleston as the second +8,000 TEU ship, when she is transferred from the Silk Express. Rania s first call at Hamburg is expected August 15 th. She will be followed by the newly delivered and similarly sized MSC Tomoko (Due at Hamburg August 22 nd ) and MSC Judith (August 29 th ). MSC Charleston was the first TEU ship in the Mediterranean Shipping Company s Lion Service. Photo: Jan Tiedemann The Closest City to Asia Speaking of Hakata, one might come to think that MSC has opted for a rather obscure Japanese port of call. Well, if you

6 think so think again! MSC s choice might have been a clever one, since the Fukuoka province and city are on their way to develop into one of Japan s boom regions. From a Japanese point of view, the city is nearest to Shanghai and Seoul. Fukuoka, likes to call itself the closest city to Asia. The region is a proof to the fact that the threat of outsourcing Japan s industrial heart was a little over-hyped, perhaps. Many strong brands like Toyota, Toshiba, Sony and Canon continue to invest into manufacturing in Fukuoka, the capital city of Kyushu Island. These companies agree that the region both offers fast shipping as well as the chance to stay close to domestic suppliers. Remember Canon s statement about its highly automated plants that make amends for Japan's high labour costs. Investment in manufacturing on Kyushu has grown by more than half in recent years, prompting locals to refer to Kyushu as Silicon Island. No wonder, that Fukuoka s city government aggressively markets the city as a gateway to Asia. Such ambitions are of course not exclusive to Fukuoka. Traditionally, Shimonoseki (in the Yamaguchi province) claims to be Japans gateway to Asia too. However, Fukuoka has some strong selling points and one of them is the region s infrastructure: The city's main port, Hakata, is handling 50 percent more containers than half a decade ago. The local airport s passenger figures are soaring and the highway network is well developed. Meanwhile, Toyota s second Japanese manufacturing base is on Kyushu island and the Lexus cars produced there are shipped to China out of Hakata. Altogether, one might be tempted to think, we will have to wait and see who will follow Mediterranean Shipping and add a Kyushu Island call to its Asian loops. MSC Fleet Update Over the course of the last weeks, Geneva-based Mediterranean Shipping Company (MSC) frequently hit the news: The company s heavy fleet- and business expansion made headlines. Lead by the Aponte family, MSC has developed from a small venture into one of the shipping industry s heavy weights in a relatively short time. Today, MSC is the number two in container shipping, only surpassed by Maersk Line and followed at some distance by the French Line CMA CGM.

7 While MSC started out with a mixed fleet of elderly ships, discarded by competing shipping companies, the last six or seven years have seen MSC investing lots of money and effort into the establishment of a new and much more streamlined fleet. A look in the MSC schedule illustrates the company s worldwide network of services: Eight of the services can be seen as large-volume mainline trades. It is in these slings, that the majority of the recently delivered new ships are employed. Four of MSC s mainline routes connect Asia and Europe. Three services link Asia and North America. A single Loop connects Europe and the North American east coast. By July 2006, the part of MSC s fleet that is less that eight years old looks like this: 3,500-4,000 TEU: two ships 4,000-4,500 TEU: 13 ships 4,500-5,100 TEU: 16 ships 5,900-6,800 TEU: 21 ships 7,900-8,400 TEU: 15 ships 9,000-9,600 TEU: seven ships This represents a fleet of 76 with a total capacity of 490,000 TEU. No other shipping company has developed such a big fleet in such little time. However, there are more ships to join the fleet before 2010: About half of these ships were ordered directly by MSC, while the other half has been signed by thirdparty operators, who will charter their ships to MSC on a logterm basis, often with a purchase option for MSC. This is the present order book: 6 x 3,554 TEU 6 x 4,250 TEU 7 x 4,860 TEU (1Q 2008) 1 x 5,089 TEU (August 2006) 8 x 5,762 TEU (until 2009) 2 x 8,089 TEU (until January 2007) 2 x 8,400 TEU 4 x 9,200 TEU (until 1Q 2007) 16 x 9,580 TEU (until 2Q 2010) Accordingly, by end of 2010 MSC will employ an additional 56 ships with a total capacity of 374,745 TEU. Until then all of major services will be operated by modern tonnage. The

8 massive order book secures MSC s second place among the container shipping companies. More orders for a non-existent shipyard Not long ago, we reported that Hanjin Heavy Industries and Construction (HHIC) had decided to build an all-new state-ofthe-art shipyard in Subic Bay, Philippines. Presently, Hanjin s Korean yard is based in Busan, where there is no more room to expand the facility. Despite a number of problems during the early stages of the development scheme in Subic Bay, the project makes rapid progress. Construction work is on schedule and shipbuilding at the new facility will commence in Originally, it was HHIC s intention to mainly build LNG-Carries at Subic Bay. However, the company failed to attract a great deal of orders for that type of ship. Instead, Subic Bay will produce Containerships. This week, French CMA CGM signed an additional two 4,300 TEU units to be build in the Philippines. Another significant order for the yard came from Hamburgbased NSC Schiffahrtsgesellschaft, who originally signed four ships and now also added another 4,300 TEU unit to their order book. *** This Newsletter is edited and compiled by Jan Svendsen and Jan Tiedemann. This pdf-file is available for download at and Feel free to contact the editors by at jantiedemann@hotmail.com and jan.svendsen@gmx.net. We greatly appreciate your feedback and your input. More contact details can be obtained from the above websites. Please note the disclaimers displayed on the download pages. All information given in this newsletter is believed correct, but not guaranteed. For assistance with the present issue, the editors gratefully acknowledge the contribution of Klaus Masuch and Willy Thiel.

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