Starship Leo Credit Im Jung-in
Credit: Im Jung-in

Healthy freight rates for shipments to Singapore, Malaysia and Indonesia have convinced South Korean intra-Asia carrier Namsung Shipping to order more containerships to meet the rising demand.

Namsung confirmed to The Loadstar today it had ordered a pair of 2,500 teu ships fitted with scrubbers from compatriot shipbuilder Hyundai Mipo Dockyard, costing $43m each.

Currently, freight rates for shipments from South Korea to Singapore, Malaysia and Indonesia are averaging between $1,100 and $1,200 for a 20ft container – a nine-fold increase on pre-Covid levels.

The booming e-commerce market in South-east Asia stimulated demand for container shipping, creating profits for all South Korean carriers last year.

The ships ordered by Namsung will be fitted with scrubbers as the company wants to power the vessels with high-sulphur fuel oil, significantly cheaper than cleaner fuels. Korea Development Bank, Export-Import Bank of Korea and Korea Ocean Business Corp are expected to provide loans to fund the deal, which follows commissions for a similar pair at HMD in November. At that time, the cost was $41m each.

These will be delivered in mid-2023 and be deployed on the South Korea-Singapore-Malaysia-Indonesia route. In February, Namsung’s closest rival, Sinokor Merchant Marine, ordered similar ships from HMD, intending them for the same route.

Namsung now has ten ships on order, including three of 1,600 teu, jointly ordered with subsidiary Dong Young Shipping and compatriot peer Dongjin Shipping, in April 2021. These ships are expected to be delivered late next year and Dong Young will operate one of the vessels.

Once all the newbuildings are delivered, Namsung’s owned fleet will comprise 29 vessels. With eight chartered vessels, the carrier is now ranked the 42nd-largest liner operator, with an operating capacity of 28,800 teu.

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