ONE Orders 10 Containerships as Part of Expansion Strategy

ONE orders more containerships
ONE ordered 10 more ships as part of tis growth strategy (file photo)

Published May 31, 2022 2:03 PM by The Maritime Executive

Singapore-based Ocean Network Express (ONE) has become the latest of the major containership operators to announce a larger newbuilding program. The order, which represents a nine percent increase in the line’s current capacity, is in keeping with the strategy mapped out by management earlier this year to move the four-year-old alliance into its own newbuildings.

ONE signed shipbuilding contracts with both Hyundai Heavy Industries and Nihon Shipyard. The two independent orders call for a total of 10 containerships to be delivered in 2025. Each yard will build five ships and each of the boxships will have a normal capacity of 13,700 TEU.

As the carrier moves to expand its ship ownership and start its direct newbuilding efforts, it elected to proceed with midsized ships after its earlier orders for ultra-large container vessels. Others in the industry have been expanding their newbuilding efforts with larger vessels starting at 15,000 or 18,000 TEU and the largest carriers are pushing the limits to 24,000 TEU. ONE previously committed to six 24,000 TEU vessels due to join the fleet in 2023 and 2024.

ONE also said that while it is “determined to become a leader in maritime decarbonization and remains fully committed to achieving sustainable marine transportation,” it is proceeding with conventionally fueled vessels. They are, however, seeking to protect their investment by making the new vessels ready for future conversion to alternative fuels. All of the new ships are planned for the "ready notation" on their classification for the possible use of ammonia or methanol as their primary fuel. 
By selecting this route, the line said, “this fleet will enable ONE to broaden the exploration of long-term alternative fuels and decarbonization technologies in the future.” They noted that in addition to designing the ships for future alternative fuels they were also designing them for carbon capture and storage in the future.

Outlining the company’s business strategy in March 2022, CEO Jeremy Nixon noted that between 2020 and 2024 the company has commitments to add 38 vessels with a total capacity of 520,000 TEU. The ships on long-term charters range in size from 7,000 to 24,000 TEU. Going forward Nixon predicted that they will annually invest in 150,000 TEU of capacity and by 2030, they will contract for a total capacity of 1.2 million TEU, but approximately half of that will be replacements for existing capacity. Alphaliner’s ranking shows that ONE currently operates 205 ships with a total capacity of just over 1.5 million TEU. With the expansion of competitors, however, they recently slipped one position in the ranking to the be the seventh-largest carrier. 

These new orders contribute to an orderbook for containerships that stands at record levels. Alphaliner and Clarksons each recently accessed the size of the orderbooks at a total capacity of 6.7 million TEU due between now and 2024. The bulk of the new deliveries are due in the second half of 2023 and 2024. They calculated that it represents more than a quarter of the total capacity in the sector which is currently just over 25.6 million TEU.