Arctic Container Lines Expand Cooperation

container ships

By MarEx 2017-01-25 17:23:33

Iceland’s Eimskip and Greenland’s Royal Arctic Line have signed a container shipping cooperation agreement, subject to confirmation from competition authorities, and both placed orders for new Polar Code-compliant container ships.

Details of the cooperation agreement have yet to be released, but Eimskip has finalized a contract with China Shipbuilding Trading Company and Guangzhou Wenchong Shipyard for two 2,150 TEU container vessels, each worth approximately $32 million. The vessels are expected to be delivered in 2019. The contract is subject to financing and Eimskip is working on securing the funding of the vessels. 

Royal Arctic Line has also signed a contract for the construction of a similar vessel.

The new vessels will have an ice class and will be designed in accordance with the Polar Code. The vessels will have an overall length of 180 meters (590 feet), breadth of 31 meters (102 feet) and they will have a TIER III engine to lower NOx emissions as well as a SOX scrubber. 

The vessels will increase efficiency and service reliability, as they are larger than current vessels in the trade and will be well equipped to sail in the North Atlantic, says Eimskip. They will consume less fuel per container unit compared to older vessels.

Eimskip was founded in 1914 and is a publicly traded company with its shares listed at Nasdaq Iceland. The company runs a network of 60 offices in 20 countries and operates 20 vessels. The company has been an agent for Royal Arctic Line since 1993. In 2016, the cooperation was extended by appointing TVG-Zimsen, Eimskip’s subsidiary, a forwarder of air-freight and trucking for Royal Arctic Line in Europe.

Gylfi Sigfússon, President and CEO of Eimskip, said: “This is an important step in the renewal and development of Eimskip’s future vessel fleet. We have also reached an agreement with Royal Arctic Line, built on our long-lasting relationship and cooperation since 1993. The port developments in Nuuk, Reykjavík and Tórshavn will enable larger vessels to serve in our market area. 

“We assume that the cooperation will increase business activities between the Arctic nations, especially between Iceland and Greenland, where activities have been limited due to lack of frequency and direct services.”

Royal Arctic Line was founded in 1993 and is wholly owned by the Government of Greenland. It also operates 13 ports in Greenland. Verner Hammeken, CEO of Royal Arctic Line, said: “The agreement for the cooperation, subject to approval from relevant authorities, is a very important step to connect Greenland to the global markets. It creates opportunities for our export customers, allowing goods to be further refined in Greenland before transporting them directly to destinations all over the world in a more efficient way. 

“Customers can also select transportation directly from new market areas instead of having to go only through Denmark. With this, we are looking at a future with more options, higher efficiency and making it easy to do business with Greenland.”