News / TS Lines closes Vancouver service and repurposes fleet for intra-Asia

S Manila. Credit VesselFinder

Taiwanese intra-Asia carrier TS Lines has sold three containerships as it refocuses resources on its core intra-Asia services.

Last week, Greek broker Intermodal reported that TS Lines had sold 2019-built 1,096 teu TS Shanghai and TS Yokohama and the 2006-built 962 teu TS Moji to a European buyer for $40m.

A source at TS Lines confirmed the sale and that it would not be chartering the ships back.

The buyer has been identified as German tonnage provider HR Schiffahrt, and brokers said there was talk that TS Lines had also put the 2007-built 2,553 teu TS Manila up for sale.

The Loadstar has reported that TS Lines would be axing its Asia-Europe and Asia-US east coast services, jointly operated with China United Lines and SeaLead Shipping, respectively.

Today, the TS Lines source revealed it had also permanently called time on its North West 1 service that connected China with Vancouver, Canada, which began in October 2021 and ceased in November last year.

The source said: “As we’re taking delivery of a dozen newbuildings this year and considering that asset values have been falling, we decided to sell a few ships to adjust our fleet size.”

The source however, declined to confirm the sale of TS Manila, bought for $6m in August 2020 and valued at around $14m.

Like many other regional carriers, TS Lines entered long-haul tradelanes when freight rates hit historical highs, only to depart these routes after market conditions normalised. Chairman Chen Te-sheng recently said the next two years were expected to be challenging, although TS Lines still hoped to complete its Hong Kong Stock Exchange listing this year.

TS Lines has 1,100, 2,900 and 7,000 teu ships being delivered from Fujian Mawei Shipbuilding and Shanghai Waigaoqiao Shipbuilding this year. The 1,100 teu vessels are designed for China-Japan routes; the 2,900s are intended for East Asia-Australia/New Zealand services, while the 7,000 teu ships are expected to be assigned to services connecting East Asia with India and the Persian Gulf.

A broker suggested TS Lines might be “cashing out of older ships” as asset values plummeted in tandem with weaker market conditions. TS Moji had a valuation of $9m when TS Lines bought the ship in May 2021, but was reportedly sold to HR Schiffahrt for $7m.

TS Shanghai and TS Yokohama were ordered from Kyokuyo for $17m each in 2018, their value peaked at around $51m each in October 2021, but had plummeted to $16.5m at the time of the recent sale.