IN a bid to boost efficiencies and keep stay afloat in a tough market, United Arab Shipping Company (UASC) is pushing for expansion, investing US$2 billion in bigger containerships and forming alliances with other shipping lines.
"Size matters in this business and we are in expansion mode," president and CEO Jorn Hinge told Reuters. "
"With the economic disasters of the past number of years, it has not exactly been good for consumer confidence. Although container trades are growing, they are growing a lot slower than planned," he said.
Mr Hinge said his company had expected to reach a volume of 2.35 million TEU in 2014, a rise from 1.8 million TEU carried in 2013 and 1.6 million TEU in 2012.
"Once all newbuildings currently on order have been delivered, we estimate annual volumes of four million TEU," he said.
UASC has 17 container ships on order for delivery between 2014 and 2016, with a total contract value of $2.3 billion. The first vessel is to be supplied in November, including six 18,000-TEUers.
Mr Hinge said the order for Triple-E vessels was made in cooperation with China Shipping Container Lines (CSCL), which will buy five separate 18,000-TEU ships. The two groups have a joint arrangement to share the vessels, helping to build further scale.
CMA CGM is the other partner in the new alliance between UASC and CSCL.
Analysts expect UASC's expansion efforts will enable it to punch far above its weight. Alphaliner estimates UASC's market share, based on fleet capacity, is 1.9 per cent.
Like many carriers, UASC has focused on the Asia-Europe route.
But Mr Hinge said UASC was looking to enhance its presence in other markets including South America, forming a cooperation agreement with Germany's Hamburg Sud last month.
"We give space to Hamburg Sud on the east-west trades and they give space to us on the north-south trades. Thereby, we achieve the same goal but without investing in additional assets or creating more capacity," Mr Hinge said.
In April 2013, UASC suspended all services to and from Iran due to a tightening of sanctions imposed on Tehran by Washington and Brussels over its disputed nuclear programme.
Mr Hinge said the loss of the Iran trade had hit carriers operating on the Middle East Gulf route as volumes had fallen, adding to the wider market pressures they face.
"Many carriers are suffering from that now," he added. "This is a part of being in liner shipping."
WORLD SHIPPING
29 October 2014 - 22:51
UASC to expand with US$2 billion order for big ships, alliances
IN a bid to boost efficiencies and keep stay afloat in a tough market, United Arab Shipping Company (UASC) is pushing for expansion, investing US$2 billion in bigger containerships and forming alliances with other shipping lines.
WORLD SHIPPING
29 October 2014 - 22:51
UASC to expand with US$2 billion order for big ships, alliances
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