Euroseas Boxship Sold for Scrap as Environmental Regulations Loom

Just weeks after admitting that the age profile of its fleet that is tilted towards older vessels is expected to be affected by greenhouse gas regulations being introduced in 2023, Athens-based operator Euroseas confirmed reports that it has sold one of its old boxships. A year ago, operators were pushing all available ships into service to meet the surge in depend but now as volumes decline and new environmental regulations loom, older ships are beginning to be retired.

Euroseas announced it has agreed to sell MV Akinada Bridge for $14.2 million to unspecified buyers. VesselTracker.com and multiple brokers are all indicating however that the 5,610 TEU intermediate containership, built in 2001, is destined for the shipbreakers in India.

“The vessel is expected to be delivered to its buyers at the beginning of January 2023,” said the company in a statement. AIS data shows that the post-Panamax size containership (71,366 dwt) which is sailing under the flag of Panama, left the port of Batam in Indonesia on its last voyage early this month. Leaving Indonesia on December 9, she is currently slow steaming at just 10 knots with the destination on her AIS shown as Alang on January 5.

Euroseas took delivery of Akinada Bridge in 2007 as part of a sale that completed the disposition of the vessels of Euromar, a wholly-owned subsidiary of the company. In 2019 and 2020, Euroseas was reporting productive charter contracts for the vessel. 

Now with regulators tightening their focus on shipping emissions, Euroseas like other independent operators reports is investing in replacing its aging fleet with modern and environmentally-friendly ships to protect its business. With the IMOS new initiatives including the Energy Efficiency Existing Ship Index (EEXI) and the annual operational carbon intensity indicator (CII) and CII rating, analysts point out that charter rates for containership markets are favoring younger fleets. With the sale of the Akinada Bridge, Euroseas will have a fleet of 17 vessels comprising 10 feeders and seven intermediate containerships. The 17 containerships, with an average age of 15.5 years, while the feeders are an average of 20.5 years old.

The company has embarked on a newbuilding program, ordering nine ecologically friendly feeder vessels to be delivered in 2023 and 2024.  The vessels will be 37,000 dwt with a capacity of 2,800 TEU with the first of the two vessels already chartered at a rate of $48,000 per day. That is significantly higher than many of its contracts, with for example a feeder built in 1999 currently operating at a rate of $14,500 per day.

“These orders will assist our transitioning into one of the most environmentally friendly feeder operators,” said Aristides Pittas, Euroseas Chairman and CEO last month.

Euroseas joins other operators which have also begun efforts to cull some of their oldest vessels. Wan Hai earlier in December invited bids for 10 of its oldest ships for demolition. Evergreen has also sold ships and brokers report an increasing number of inquiries. Analysts have forecast that overcapacity would create a possible wave of ships being demolished but said it was unlikely to balance the market in the short term with new ships further adding to the increase in capacity in 2023.