What is around 400 meters long, 60 meters wide, 70 meters high and costs over $140,000,000 ($140 million)?
It’s a mega ship of course, or more precisely, an Ultra Large Container Vessel (ULCV).
What started out as an effort to optimise on economy and efficiency with an environmental touch on these size of ships in 2013, soon became kind of a mine-is-bigger-than-yours showboating.
Between 2013 and 2019 there were 8 “largest container vessel in the world” title holders operated by some of the world’s largest container shipping lines.
The increase in TEU capacity in the last 6 years within this ULCV class is around 5,964 TEU which is the size of a regular container vessel still operating in many of the world’s trades now.
On the 23rd of April 2020, HMM, the 9th largest container shipping line in the world, became the latest title holder of the largest container vessel on the earth when they revealed “HMM Algeciras“, their first 24,000 TEU containership at a naming ceremony in Korea.
The First Lady of Korea, Mrs.Kim Jung-sook who served as godmother, cut the ropes and officially named the ship at a naming ceremony at DSME’s Okpo shipyard in Geoje, Korea.
“HMM Algeciras” is the first of twelve 24,000 TEU class vessels scheduled to be sequentially delivered until September 2020 out of a total of 20, with the balance 8 planned for delivery from second quarter of 2021 onwards.
HMM signed a formal contract in 2018 for these twenty ULCVs vessels with three shipyards – DSME (Daewoo Shipbuilding & Marine Engineering), HHI (Hyundai Heavy Industries) and SHI (Samsung Heavy Industries) in an effort seen as a proactive action towards market change along with creating a sustainable profit-generating structure.
As per their official statement, HMM plans to enhance its environmental capabilities by operating these newly launched container vessels as they are equipped with scrubber systems in line with IMO 2020 environmental regulations. The optimised hull design and highly-efficient engine are also expected to improve energy efficiency and reduce carbon emissions.
Speaking at the ceremony, Mr.Moon Jae-in, President of the Republic of Korea said “For me, it is very meaningful that HMM takes delivery of the most technologically advanced containership in this difficult time. I would like to celebrate it and hope that HMM continues to secure a competitive advantage as a Korean national flagship carrier.”
“HMM will strive to expand its presence in the global shipping industry based on optimised fleet management and new cooperation with THE Alliance.” added Mr.Bae Jae Hoon, President & CEO of HMM.
This new development comes close on the heels of the company rebranding itself from the previous “Hyundai Merchant Marine” to “HMM”, a decision that was approved at the 44th annual shareholders meeting of the company, in Seoul, on 27th March and came into effect from the 1st of April 2020.
This change brought an end to the name “Hyundai Merchant Marine” which has been in use for around 37 years from the time the company changed its name from 1983 when the company was known as “Asia Merchant Marine”.
Mr.Jae Hoon Bae, President & CEO of HMM, said then that, “This is another step in our company’s bright future. I believe it is vital for us to rebrand ourselves in the course of a huge leap forward in 2020” and added, “Most of our customers and employees will not be confused as the name ‘HMM’ has already been recognised and familiar to the global market”.
He also stressed that “HMM will continue to expand its business coverage and develop more capabilities to successfully serve our valued customers.”
Earlier this year, the members of THE Alliance, Hapag-Lloyd, Ocean Network Express, and Yang Ming welcomed HMM as a new core member of THE Alliance.
As per HMM, this full membership from 1st of April 2020, provides them a new service structure which provides 33 services; coverage of 78 ports throughout Asia, Europe including Mediterranean, North and Central America, the Middle East, Red Sea and Indian Subcontinent.
The “HMM Algeciras” is expected to be deployed on Far East Europe 4 (FE4) service, one of the Asia-North Europe trade lanes of THE Alliance, with its port rotation starting at Qingdao, Busan, Ningbo, Shanghai, Yantian, Suez Canal, Rotterdam, Hamburg, Antwerp, London Gateway, then Singapore via Suez Canal.
The HMM Algeciras which is approximately 399.9 m long with a beam of beam (width) of 61.0 m and can carry 23,964 TEU, is registered in Panama although ironically enough, it cannot transit the Panama Canal due to its beam.
While the deployment of such ULCVs continues on one side as a part of the shipping line’s search for greater fuel efficiency and economies of scale, there are also several challenges faced by these mega ships due to port congestion (which some people claim to have been created by these behemoths) and issues in handling these massive volumes of cargo.
It will be interesting to see the strategies that will be followed here because these ULCVs that were supposed to usher in efficiency-driven profitability are said to have become a financial albatross for the container lines especially during this COVID-19 pandemic.
The Wall Street Journal reported that “Ocean carriers have canceled hundreds of services, parked ships and sent vessels on longer voyages to eat up capacity and preserve their finances amid diving trade volumes. But the ultra-large ships that have come to dominate container fleets in recent years are sailing half empty as a downturn in demand envelops Western economies under lockdowns.”