Global shipping giants MSC from Switzerland and CMA CGM from France are reportedly considering large-scale feeder newbuilds worth billions of dollars. This could become a new opportunity for domestic shipbuilders amid a significant decline in ship orders this year.
According to foreign media on the 25th, MSC, the world's largest shipping company by capacity, and CMA CGM, the third-largest, are reviewing new orders to replace their fleets of container ships operating as feeders, which are below 6000 TEU (Twenty-foot Equivalent Units, where 1 TEU equals 1 20-foot container).
Norway's TradeWinds estimated that the two shipping companies would need about 120 vessels to replace their feeder fleets. Container ships vary significantly in price based on size and specifications, with the average newbuild price for ships under 6000 TEU reported to be $45 million (approximately 6.21 billion won). If 120 ships are ordered at this average price, the total would amount to 7.5 trillion won.
The reason they are considering fleet replacement is due to environmental regulations. According to the Baltic and International Maritime Council (BIMCO), the average age of all container ships is 14.2 years, but 92% of vessels over 20 years old are small to medium-sized, below 5999 TEU.
The European Union (EU) has implemented a carbon emissions trading system (ETS) since last year. Accordingly, vessels over 5000 GT (gross tonnage) entering and exiting European ports must purchase emissions allowances based on their carbon emissions. The International Maritime Organization (IMO) plans to set greenhouse gas emissions relative to the amount of cargo transported for vessels meeting the same criteria starting in 2027, imposing a carbon tax of up to $380 per ton for emissions exceeding this limit.
Domestic shipbuilders have primarily received orders for high-value vessels, but with a sharp decline in orders this year, a large volume of feeder ship orders could help secure work. In the first half of this year, the global order volume for ships was 19.38 million CGT (Compensated Gross Tonnage), a decrease of 54.4% compared to the same period last year.
According to Clarkson Research, a total of 14 container ships under 8000 TEU were delivered by the domestic shipbuilding industry in the first half of this year, a 63% decrease compared to the same period last year. The share of this size in the total number of container ships delivered during the same period also fell by 22.4 percentage points to 31.1%.
An industry insider noted, "The dual-fuel propulsion engine technology, which represents eco-friendly ships, still lags behind China. If major shipping companies replace feeder ships with eco-friendly vessels, medium-sized shipyards such as HD Hyundai Mipo, HJ Shipbuilding & Construction, Daehan Shipbuilding, and K Shipbuilding could benefit."