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Seaspan Orders More Containerships Approaching 30 Percent Growth

Seaspan orders more containerships to be built
Berlin Bridge is one of the containerships built for Seaspan in 2019 (Seapan)

By The Maritime Executive 03-30-2021 05:53:07

Seaspan is continuing its unprecedented order spree for new containerships. The Hong Kong-based owner that charters vessels to all of the major containership operators reported that it has placed an order for six additional newbuilds. The company is executing a rapid expansion of its fleet with the newest orders bring to 37 the number of newbuild orders placed since December 2020.

The newest orders, which were announced just three weeks after the previous orders, are part of Seaspan’s efforts to employ its financial strengths and customer relationships to benefit from the strong demand for new tonnage. The lack of capacity and the perceived long-term strong market outlook are contributing to the overall recent boom in construction orders. According to Alphaliner, market demand combined with low-interest rates and fierce competition among shipyards is driving more investors, lessors, and carriers to resume orders for new ships. 

Seaspan and its parent company Atlas offered few details on the latest construction order. They announced they have entered into an agreement with a major shipyard for six 15,500 TEU modern containerships. They anticipate deliveries will begin in the second half of 2023 and extending through to mid-year 2024. The vessels are to be financed from additional borrowings as well as cash on hand.

The six newly ordered vessels will use conventional fuel and will be outfitted with scrubbers, and other unspecified emissions reduction technologies. Upon delivery, Seaspan reports the vessels will enter long-term charters with a leading global liner customer.

“I am proud of Seaspan's strong commitment to leading the industry by leveraging our fully integrated platform, broad scale, flexibility, and determination to be the best-in-class business solution provider to our liner customers,” said Bing Chen, Chairman, President and CEO of Seaspan. "Our creative customer partnerships continue to drive best-in-class solutions for our customers and quality growth for our shareholders."

Seaspan's strategy continues to focus on a core strategic size category of approximately 10,000 to 15,000 TEU. The company has announced a total of six orders between December 7 and today. The current orders include nine vessels in the 12,000 TEU category and another 26 in the 15,000 TEU range. Only two of the orders are for ultra-large 24,000 TEU vessels. 

In total, Seaspan now has 37 newbuilds on order expanding its fleet which consisted of 127 vessels as of the end of 2020. Also, Seaspan has agreed to buy two vessels from the secondary market. Combined, the new ships will have a capacity of 580,000 TEU adding 30 percent to the company’s capacity of just under 1.1 million TEU as of the beginning of 2021.

Seaspan primarily works with long-term, fixed-rate time charters to the world's largest container shipping liners. The lines like the strategy as they are not required to tie up their capital or issue debt to obtain new vessels while Seaspan uses its financial strength and long-term commitments from the lines to finance the ships on attractive terms.