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CSCL to acquire up to 11 ships of 21,000 teu
CSCL's current largest ship, the CSCL Globe, has a capacity of 19,100 teu

CSCL to acquire up to 11 ships of 21,000 teu

China Shipping Container Lines (CSCL) has announced plans to lease up to 11 Ultra Large Container Vessels (ULCVs) of 21,000 teu via a wholly-owned subsidiary under a bareboat charter.

In a filing to the Hong Kong Stock Exchange, the shipping line, which is China’s second largest carrier after Cosco, said that it will bareboat charter six of the ships with an option to charter an additional five.

The carrier said that it will operate the six ships for six months of the charter agreement and then decide whether to order the additional five, adding that it was following an industry trend of operating larger vessels.

CSCL will pay a daily charter hire of US$41,000 for each vessel during the charter period of 12 years on a monthly basis with the first instalment on the date of delivery, which will between April 2018 and December 2018.

According to the company, the plans would enable it to decrease fuel emissions and optimise its fleet.

Commenting in the filing on the reasons for entering into the charters, a company statement said: “The group adheres to low-carbon environmental protection initiatives, positively responds to the current development trend for large-scale container vessels in the shipping market, and is committed to adjusting and optimizing the structure of its fleet.”

On the same day of its charter announcement, CSCL reported a 256% drop in its net profit from January to September 2015 to a loss of US$163m compared to a profit of US$105m in the same period last year.

Commenting on the drop, the company said in its statement: “The decrease in net profit attributable to equity holders of the parent company by 255.80% during the Reporting Period as compared with the corresponding period of last year was mainly due to the decrease in operating profit of the Company.”

The company reported a US$82m loss in from July to September 2015 compared to a US$26m profit in the third quarter last year.

The carrier’s revenue went down by 11% from US$26.7bn in the first nine months of 2014 to US$23.9bn in the same period this year.

CSCL is one of several carriers which have already invested in ULCVs. The company’s current largest ship is the CSCL Globe, which, with a capacity of 19,100 teu, was the world’s largest ship in November 2014.

Cosco reported a US$267m loss in the third quarter ended September 30, 2015 against a profit of US$256m in the same period last year.