Wallenius Wilhelmsen Plans to Restart Three More Vessels at Mid-Year
Citing improving market conditions and a tightening charter market, RoRo operator Wallenius Wilhelmsen announced plans to reactivate three additional vessels. Nearly a year ago, the line had laid up 16 ships from its fleet of approximately 130 vessels that it was operating on 15 trade routes around the world. At the time, Wallenius Wilhelmsen cited declines in demand due to the impact of the pandemic.
“As part of our operations we have the ability to adjust the fleet to our needs and changing market conditions,” said Craig Jasienski, CEO of Wallenius Wilhelmsen. “While it remains challenging to predict the potential market impact from virus intensity in parts of the world, the overall industry supply-demand balance is expected to improve in the mid-term due to overall global fleet reduction, low order book and a rebound in volumes during 2021.”
The line will restart in June and July three ships that have been in cold layup, however, they will be used to replace vessels that are currently sailing under short-term charters. In January, Wallenius Wilhelmsen announced that it had decided to reactivate up to nine of the 16 vessels placed in layup last spring. All nine are now in the process of being reactivated.
In announcing these actions, the line said that the scarcity of capacity and rising rates in the time charter market continue to make reactivation of vessels in layup a more cost-competitive option. Reactivation of the remaining four vessels in layup will be considered based on market developments in the first half of this year.
A year ago, in March 2020, the company began efforts to reduce capacity and lower its costs. In addition to temporary staff lay-offs, they announced the early retirement of four vessels all 24 years or older that would be sold for recycling. They also redelivery seven chartered vessels to the tonnage providers.
A market analysis revealed an overcapacity of between 10 and 15 vessels they reported. By June 2020, a total of 10 vessels had been placed in cold layup with seven in Norway and three in Malaysia. Wallenius Wilhelmsen said it was the first time in 12 years that they had laid-up vessels. They expected it would take three to four weeks to restart a vessel that was in cold layup.
The company is also completing its vessel construction program. The fourth and final new build in its HERO (High Efficiency RoRo carrier) class is scheduled to be delivered later this year. Each vessel is nearly 24,000 dwt with a capacity of 7,656 vehicles.