News / MSC's new spending spree to boost 'already massive' orderbook

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MSC is reigniting its vessel newbuilding programme, reportedly placing orders and options for 20 ultra-large container vessels (ULCVs) with the Hengli yard in China.

According to analysts at Alphaliner, the world’s largest shipping line is set to increase its capacity lead over second-placed Maersk with more additions to its “already massive newbuilding pipeline”.

Brokerage sources claim the Geneva-based carrier has signed firm contracts for ten 20,000 teu vessels with LNG dual-fuel propulsion, and Alphaliner noted: “On top of this, the carrier is believed to have signed ten options for additional vessels of the same class with Hengli.”

If the orders are confirmed and the options exercised, this would add 400,000 teu of capacity to MSC’s newbuildings programme, which already stands at 2.39 million teu across 146 ships.

With a potential 2.8m teu on order, the carrier’s orderbook-to-fleet ratio would increase from the current 32% to just over 38%.

MSC’s fleet today comprises 7.39m teu across 1,001 ships – owned capacity is 4.7m teu, across 754 ships, while chartered capacity amounts to 2.64m teu, across 247 vessels, meaning its orderbook is now slightly higher than the combined capacity of its chartered fleet.

Alphaliner added that the “vast majority” of the vessels under construction were larger than 10,000 teu and MSC had shown a clear preference for its ULCV-class ships to be around 21,000 teu size.

It added: “Alphaliner understood that MSC had made an effort to renegotiate some of its newbuilding orders to have numerous ships of 18,000 teu upgraded to slightly larger designs, to ‘standardise’ its future mainliner fleet around a compact class of highly optimised 21,000 teu-plus vessels.”

Meanwhile, Hengli has become the carrier’s go-to shipyard for newbuildings, following the signing of an agreement between them last year to collaborate on shipbuilding, engine manufacturing, ship repair and retrofitting.

“Assuming the new orders will be confirmed as reported, MSC’s newbuilding pipeline at Hengli would increase to a whopping 40 ships plus ten options. This includes ten 24,000 teu ‘megamaxes’ and 30 ships of around 20,000 teu (likely closer to 21,000 teu) with ten more options,” said Alphaliner.

MSC is also rumoured to be the carrier behind an order from non-operating shipowner (NOO) Global Ship Lease for five 6,200 teu vessels.

According to a NASDAQ release from New York-listed Global Ship Lease, these “ultra-high-reefer, wide-beam, latest-generation containerships” will cost “approximately $413m”.

GSL added: “Upon delivery from the respective yards, scheduled within 2029, the newbuilds are contracted on multi-year charters with a teu-weighted average term of 8.1 years, and at rates expected to generate aggregate.”

Alphaliner said today: “GSL ordered all five ships on the back of long-term forward charter commitments to an unnamed major ocean carrier.

“The owner’s first 10 ships of this fleet renewal programme will join MSC under long-term charters; whether the Swiss-Italian carrier is also behind the next five units, remains to be seen.”