K Line joins ultra-large boxship club at last


Japanese shipping giant K Line has confirmed it will become the latest to join the ultra-large container vessel club after signing a letter of intent to build five 14,000teu vessels at Imabari Shipbuilding (pictured).
As our sister publication Lloyd’s List has previously reported, the carrier’s move has been anticipated for some time as its alliance partners, Cosco Container Lines, Yang Ming Marine Transport and Hanjin Shipping, have all started to deploy or order giant boxships.

Cash-strapped K Line, with a debt-to-assets ratio at 72.4% as of end-2012, is still mulling whether to take ownership of the vessels or charter them from a leasing unit that will sign the formal newbuilding contract with Imabari.

“We are still discussing the final details and expect to make a decision soon. We don’t rule out any possibility,” K Line containership strategy manager Yasushi Shigeno told Lloyd’s List.

“Our plan is to deploy all our big vessels in the CKYH alliance service, possibly in Asia-Europe trades. We will discuss with Yang Ming whether we will have a joint loop, though we haven’t decided on anything yet.”

Among the world’s 20 largest container shipping lines, K Line will be the 16th to order ultra-large boxships. However, the late entry might actually benefit the carrier, as it can enjoy collapsing newbuilding prices.

“We anticipate this will result in remarkable improvement of both efficiency and cost competitiveness,” Shigeno said.

“We can enjoy lower costs versus our 8,000teu ships,” which are currently the largest vessels in K Line’s fleet, he added.

However, like many other operators, the carrier stressed that it had no plans to expand its overall shipping capacity and that some panamax vessels were likely to be withdrawn from its fleet.

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