Wallenius Wilhelmsen Orders Next-Gen RoRos as Sector Sees Strong Demand

next generation car carrier
Wallenius Wilhelmsen signed a letter of intent for up to 12 methanol-capable and ammonia-ready vehicle carriers (WW)

Published Aug 15, 2023 4:04 PM by The Maritime Executive

Norwegian shipping company Wallenius Wilhelmsen is proceeding with a shipbuilding order for a new generation of vessels that they are calling “The Shaper Class,” for its ability to lead the future of the industry at a time of high demand. The new vessels will be not only among the largest in the industry, but they will also adopt alternative fuels as part of the company's efforts to deliver an end-to-end net-zero emissions solution by 2027.

The order is for four 9,350 CEU vessels with an option for up to eight additional vessels. The company told investors they can exercise the options in two batches of four vessels each. The ships are to be built by China’s Jinling Shipyard (Jiangsu). The first vessels will start being delivered from the second half of 2026.

In addition to their size, the new vessels are more streamlined for efficiency. They will be built with a dual-fuel propulsion plant that will be methanol-capable on delivery and ammonia-ready. The company noted to investors that the ability to install ammonia propulsion at a later stage “provides for optionality when it comes to a choice of future green fuel types.”

“The process of developing our new design started over 1.5 years ago and the newbuidlings team have been working in close collaboration with the designer, Delta Marin, and internal and external stakeholders during this period, to ensure the vessel design meets safety requirements and is well suitable for our future short term and long-term operational needs,” said Lars Ekren, Senior Manager – Newbuildings and Conversions.

The company highlights that the vessels are designed to support its trading patterns. They said the new design will have a high degree of flexibility allowing for a variety of cargo compositions.

The decision to proceed with the newbuilding order comes as the industry is experiencing strong demand. Wallenius Wilhelmsen is the largest RoRo vessel operator, with a current fleet of 126 vessels, down from 131 as they redelivered some ships and noted that charter rates remain very high. The company has no short-term charters currently. That helped them to report overall revenues that were up four percent quarter-to-quarter and nine percent year-over-year, to approximately $1.3 billion overall and $987 million specifically for ship services transporting vehicles. EBITDA was up more than 50 percent year-over-year.

Reviewing the market for investors, the company said there are currently 760 vessels with a capacity of over 1,000 units and a total capacity in the sector of just over four million units. Since early April, they said 16 new vessels have been ordered with the total orderbook for the sector at 154 vessels, which represents 29 percent of current capacity. Two new vessels were delivered into the sector in the second quarter while none went to scrap and six more are due for delivery before the end of 2023.

Driving the strong orderbook is strong growth in demand. They cited data from S&P saying auto volumes were up more than 11 percent in major markets, making it the best quarter in two years. Chinese exports were driving the market with 45 percent year-over-year growth, especially with battery electric vehicles. Exports were also strong from Europe and Japan while South Korea is showing steady growth and only North American exports were more muted. Key drivers for the industry are the volumes exported to North America and Europe.

Wallenius Wilhelmsen told investors that it expects the market strengths to continue. They expect to maintain a fleet of 125 to 135 vessels and are using the current opportunities to drive their transition strategy for net zero operations.