News / Tighter PCTC supply restricts China’s car-building boom

Artists impression of PCTC. Credit Guangzhou Shipyard International

The shortage of pure car and truck carriers (PCTCs) is set to become more acute as China stays on course to surpass Japan as the world’s largest car exporter.

China Association of Automobile Manufacturers statistics suggest China exported 3.1 million cars last year, up 54% year on year, exceeding forecasts of 2.4m.

Last year, Japan exported 4.36m cars, but China’s growth saw it overtake Germany as the world’s second-largest car exporter.

However, the supply of, and demand for, PCTCs to ship China’s car exports is unbalanced, prompting carmakers like SAIC to establish in-house shipping companies and order their own ships.

During Covid, there was under-investment in PCTC newbuildings as movement restrictions slashed demand for new vehicles, resulting in many older PCTC’s being scrapped. Now, with China abandoning its zero-Covid policy and countries resuming pre-pandemic routines, there not enough PCTCs to meet demand.

Last year, in response to China’s growing car exports, Guangzhou Ocean Car Carrier (GOCC), a joint-venture with Cosco, SIPG Logistics and SAIC Anji Logistics, was launched and on Friday, it stretched its PCTC orderbook to 24, after commissioning three 7,000 car-unit LNG dual-fuelled vessels at Guangzhou Shipyard International (GSI).

It already has 21 LNG dual-fuelled PCTCs with capacity for 7,000 to 8,600 cars each. The new ships will be delivered from H2 24.

In addition, GOCC has committed to long-term charters for six 7,500 car-unit PCTC newbuildings from Japanese owner Santoku Senpaku to be delivered between 2025 and 2026.

The latest round of newbuilding orders also consolidates GSI’s position as a major PCTC builder, with 22 vessels in the pipeline.

Even as China’s car exports are growing exponentially, particularly electric vehicles (EVs), the fire risk posed by lithium-ion batteries that power them could be a cloud over the sector. The issue was spotlighted when MOL’s PCTC Felicity Ace was burnt out in February last year, resulting in the loss of 4,000 Volkswagen cars.

A test conducted by Japan’s NYK Line, with the Japanese Maritime Disaster Prevention Centre and Britannia P&I Club in 2021 showed that, when an EV battery pack is subjected to a flame, the resulting fire can spread beneath the vehicle within ten minutes to the plastic trim, which subsequently burns readily, increasing the likelihood of the fire spreading to adjacent vehicles within 15 minutes.

Britannia suggests EVs will dominate the proportion of cars transported on PCTCs and ro-ro vessels, so that fire detection, suppression and fire-fighting strategies must improve in tandem.

A meeting in London tomorrow will discuss the issues around the safety of transporting EVs on ships.