News / Hapag-Lloyd kicks off its ship demolition programme

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Hapag-Lloyd has sold three elderly ships for demolition, sticking to a plan outlined in last month’s earnings call.

Singapore’s Wirana Shipping Corp, which acquires old vessels for recycling, said on Monday that Hapag-Lloyd had sold two 1998-built ships, 2,800 teu Mississauga Express and 2,992 teu Ottawa Express, and 1996-built 2,330 teu Milan Express for a total of $17.27m.

Wirana said the ships would be recycled in Turkey and fetched a good scrap price due to the “good amount of spare parts” on the ice-class vessels.

Last month, Hapag-Lloyd CEO Rolf Habben Jansen said: “We have a number of ships that are going to reach the end of their lifetime in the next 24 months, and the majority will go to the scrapyards.” Vessel databases show the carrier has 22 other ships aged 20 years and older, ranging from 2,300 to 7,500 teu.

Boxship demolitions have resumed since late 2022, after freight rates began correcting to pre-Covid levels, although the pace has been slower than expected. Alphaliner said today the sale of the three Hapag-Lloyd ships brings to 41 the number sold for demolition this year, for a total of 81,300 teu.

Liner operators have been adding capacity as they fight for market share, while shipping analysts have suggested that cash accumulated in the pandemic years meant they don’t need to rush to scrap loss-making vessels.

According to Linerlytica, Hapag-Lloyd is the fifth-largest carrier, with a fleet of 251 vessels, of which 128 are chartered-in, for a capacity of 1.8m teu. It has an orderbook of 17 vessels, for 350,000 teu, including a dozen at 24,000 teu for delivery over the next two years for THE Alliance’s Asia-North Europe loops.