Asia/Pacific News
Cosco Orders 14,500 TEU Bunker Saving Box Ships, Warns They Could be "a Double-Edged Sword"
China Cosco Holdings Co. (Cosco) has ordered five fuel-efficient, 14,500 twenty-foot equivalent unit (TEU) container ships for delivery between 2017 and 2018 in an effort to revive its profits, but warned the giant box ships could bring mixed fortunes, Bloomberg reports.
The Beijing-based, state owned company's order comes as the company seeks to reduce its operating costs by making its fleet more efficient.
"Many of its container and bulk ships are obsolete and lack competitiveness," said Winnie Guo, Analyst at China Construction Bank Corp. recently of Cosco's current fleet.
However, Guo Huawei, Cosco's Board Secretary, said operating such large ships can be "a double edged sword."
"The ships need to be filled for the cost savings to be achieved," he added, inferring the challenge posed by a continuing capacity glut in the box market.
In the meantime, Cosco's container shipping arm, which accounted last year for around 73 percent of revenues, was reported to have reduced its fuel costs by 18 percent in the first half of 2014 through slow steaming.
Recently, Chinese competitor China Shipping Container Lines Co. announced it was set to launch the first of a series of fuel-efficient 19,100 TEU box ships in November.
