News / Yang Ming ends charter and buys three box ships at a discount

YM Wellspring Source: Paul Chang

Yang Ming has terminated charters for three 14,000 teu ships, opting to buy them halfway into the eight-year agreement.

The Loadstar has learned that in late July, the Taiwanese liner operator completed the purchases of YM Warranty, YM Wellspring and YM Wellbeing, built by Imabari Shipbuilding in Japan between 2018 and 2019 and chartered by Imabari affiliate Shoei Kisen Kaisha.

YM Warranty and YM Wellspring are deployed on transpacific lanes, while YM Wellbeing plys the Asia-Persian Gulf route.

Yang Ming confirmed, in a Taiwan Stock Exchange filing, that the aggregate purchase price of the three vessels was between $302m and $310m.

A Yang Ming spokesperson told The Loadstar that move was part of the company’s medium- and long-term financial planning and the “flexible use of funds”, adding: “The company also pays attention to the supply and demand of ships at any one time, and is  implementing stable fleet development.”

Although MSC, CMA CGM and Wan Hai Lines have grown their fleets by aggressive secondhand ship acquisitions, other box lines, including Yang Ming, have been conservative. It has been nearly 20 years since Yang Ming bought pre-owned ships.

Around 2008, when compatriot Chinese Maritime Transport closed its container shipping operation, it sold four 1,500 teu vessels to Yang Ming. Thereafter, the carrier has ordered or chartered newbuildings.

Market sources suggested that Shoei Kisen Kaisha may have offered the ships at an attractive price. Like many liner operators, Yang Ming is sitting on excess cash after the Covid-19-fuelled boom and probably decided to use some funds to expand its fleet. Yang Ming had $3.7bn of cash holdings as of 31 March.

VesselsValue assesses each ship to be worth around $132m, meaning each vessel was sold at around a $30m discount.