Höegh Autoliners has undertaken a major project with Hyundai Vinashin Shipyard in Vietnam to increase capacity on ten of its vessels.
The project involves cutting the PCTC vessels in two and inserting a 28-metre prefabricated mid-ship section, which will increase each ship’s capacity from 6,100 to 7,600 CEUs.
So far three vessels – the Höegh Detroit, Höegh Berlin and Höegh Tokyo – have been extended and are back in service.
According to Höegh, the method of inserting the sections offers customers additional capacity substantially earlier than the normal new-building route, which can take three to four years from placing an order to delivery of the new vessels – it took under two months to complete work on the Detroit.
The lengthening of ships also appears to be a more attractive solution to capacity constraints than the $90 billion price tag of a new ro-ro vessel, especially given the uncertainty in the market during the global economic downturn. Rapid global expansion in the car market in recent years had caused a ro-ro capacity shortage of around 10 per cent, prompting many shipping lines – Höegh included – to order a substantial number of new ships, most set to come online over the next three to four years.
Hoegh’s extension projects comes amid signs that shipping lines, particularly container lines such as Maersk, are now cutting back capacity to boost prices as they face slower growth and increased competition. In October, the CYKH Alliance, consisting of Coscon, K Line, Yang Ming and Hanjin Shipping, confirmed it had slashed capacity by 18.5 per cent by suspending its all-water East Coast central loop (AWE).
However, at the time of commissioning the extensions, Hoegh was looking at particularly tight capacity, especially in the outbound leg on the Far East trades, which could still grow during the recession, albeit slower than expected.