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Wan Hai Emerges as Buyers for CSBC’s Four Speculative Newbuilds

shipyard auctions newbuild containerships
CSBC has previously built containerships for Wan Hai (CSBC file photo)

Published Aug 15, 2022 5:06 PM by The Maritime Executive

In an unusual move meant to take advantage of the strong demand for containerships, Taiwan’s CSBC Shipyard auctioned four newbuilds that they decided to build on speculation. With long waiting times for building slots and strong demand in the industry, the shipyard was able to offer four smaller, 3,000 TEU ships that it promises to deliver in 2023.

Taiwan’s Wan Hai Lines announced in a stock exchange filing on August 12 that it came out victorious in the bidding for the vessels. CSBC reportedly invited 20 shipping companies into the tender process for the four vessels. Wan Hai reports it will pay between $53 and $55 million for each vessel for a total transaction amount of $212 to $220 million.

The unusual approach to building ships appears to have been successful both for the yard and for Wan Hai. The carrier reported the new vessels will fill an important gap in its new vessel introduction plan. They said the ships will be used to replace older, less efficient vessels to improve fuel expenses and operating efficiency. 

CSBC, which has been working to recover after years of financial losses, is likely to be profitable on the transaction and gains an important entry into the containership market. The yard had been seeking to expand its containership orders and said it planned to enter into joint marketing agreements with the South Korean or Japanese shipyards.

Plans for the four vessels were announced in August 2021. The yard said it was using a modern, fuel-efficient design that would meet the emerging IMO regulations. The yard decided to move forward starting the construction of the vessels at the end of 2021 while it was still seeking either a buyer or long-term charter operator. 

The strength of the sale and purchase market with major carriers seeking to lower charter costs through vessel acquisitions was also recently demonstrated by Seaspan. Known for its long-term charter agreements with the world’s leading carriers, Seaspan announced that it had strategically harvested assets from its fleet in 2022. During its second quarter report last week, the company said it had sold nine of its smaller container ships during the quarter bringing to 10 its sales in 2022. In all of 2021, Seaspan had sold only seven vessels from its fleet as it works to add more than 800,000 TEU to its capacity.

Wain Hai earlier this month held the naming ceremony for the first three vessels in its newest series of containerships. They are 3,013 TEU containerships built by Japan Marine United Corporation Tsu Shipyard. The first of the vessels is due to enter service this month on the company’s Asia – America route, a service Wan Hai launched as an independent in 2021. A month earlier, Wan Hai marked the completion of the last of a dozen ships in a series built by China Shipbuilding Trading Co. and Guangzhou Wenchong Shipyard Co. Each of the vessels has a capacity of 2,038 TEU with the final vessels entering service this month on the company’s Korea-South East Asia Service as part of the ongoing effort to expand and modernize its fleet with more efficient ships.

Wan Hai currently is ranked as the eleventh largest carrier by Alphaliner. They report the company currently has a capacity of just over 430,000 TEU and orders for vessels with a capacity of more than 321,000 TEU.