News / Yang Ming takes early delivery of new box ship for transpacific service

Yang Ming has taken charge of the fourth in the series of ten 12,690 teu neo-panamax vessels three months ahead of schedule. 

The Taiwanese carrier said the YM Target (pictured above) will be deployed immediately on THE Alliance’s transpacific PN3 loop, which links Asia with the North American west coast ports of Vancouver and Seattle, due to “increased demand prior to Chinese New Year”. 

The vessel, which Yang Ming classifies as having an intake of 11,000 teu, has a length of 332 metres, a beam of 48 metres, is equipped with 1,000 reefer points and has a cruise speed of up to 23 knots. 

“The hull dimensions enable these ships to call at major ports across the world, pass through the Panama Canal with no restriction and facilitate greater flexibility in vessel deployment,” said Yang Ming. 

Having concentrated almost entirely on ordering 18,000 teu-plus ULCVs in the past few years, carriers are desperate to deploy mid–to-larger sized boxships to plug gaps in networks unsuitable for the largest ULCVS. 

Moreover, the exponential rise in freight rates has, arguably, made smaller ships more attractive to carriers on liner trades, given their greater operational flexibility. 

However, there is an acute shortage in the charter market of tonnage in these sizes, prompting big spikes in daily hire rates and ship asset values. 

Yang Ming has chartered the ship from Greek shipowner Costamare, which ordered the 10 scrubber-fitted vessels  from the Chinese Jiangsu Yangzijiang yard in July 2018. 

According to vesselvalues.com, Costamare paid $85m each for ships which are now worth around $116m. The carrier has them on a 10-year charter at an undisclosed daily hire rate. 

Several vessels of this type have recently been fixed on long-term period charters north of $30,000 a day. 

For example, MSC has concluded new 10-year charters with Costamare for four 2016-built 11,010 teu ships at a daily hire of $33,000, compared with the market rate of circa $20,000 when they were first delivered. The shipowner paid $81m for these vessels, which are now worth $100m each according to vesselvalues.com. 

Costamare chief financial officer Gregory Zikos said “on the back of a rising market”, it had chartered 20 of its ships during its fourth quarter for periods of up to 10 years, “substantially enhancing both our contracted revenues and charter coverage”. 

He added: “We have 10 ships coming off charter over the next six months, which positions us favourably.”

Yang Ming moved into the black in Q3 for the first time in two years, reporting a net profit of $82m. However, over the past five years the carrier has reported losses of around $800m. 

Nevertheless, like its industry peers it seems that, providing freight rates remain high, as expected, Yang Ming can look forward to several more quarters of profitability. It is the 9th-ranked carrier by capacity, with a fleet of 88 ships for 614,541 teu, having recently been overtaken by THEA partner HMM.