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Hapag-Lloyd sold 3 vessels for recycling

Hapag-Lloyd sold 3 vessels for recycling
Hapag-Lloyd sold 3 vessels for recycling

Hapag-Lloyd, a major container shipping company, has sold three older vessels for demolition, following their plan outlined in a recent earnings call. Singapore’s Wirana Shipping Corp, a company that acquires old ships for recycling, announced that Hapag-Lloyd sold two ships built in 1998, the Mississauga Express with a capacity of 2,800 twenty-foot equivalent units (TEU) and the Ottawa Express with a capacity of 2,992 TEU, as well as a 1996-built ship named Milan Express with a capacity of 2,330 TEU. The total sale price for these three ships amounted to $17.27 million.

Wirana Shipping Corp stated that the vessels would be recycled in Turkey and fetched a good scrap price due to the availability of a “good amount of spare parts” on the ice-class vessels. Hapag-Lloyd’s CEO, Rolf Habben Jansen, had previously mentioned that several ships in their fleet would reach the end of their operational lifespan in the next 24 months, with the majority being sent for demolition. The company currently has 22 other ships aged 20 years and older, ranging from 2,300 to 7,500 TEU, according to vessel databases.

The number of boxship demolitions has increased since late 2022 as freight rates returned to pre-Covid levels, although the pace has been slower than anticipated. As per Alphaliner, the sale of the three Hapag-Lloyd ships brings the total number of ships sold for demolition this year to 41, with a combined capacity of 81,300 TEU.

Liner operators have been adding capacity to compete for market share, and shipping analysts have suggested that accumulated cash reserves from the pandemic years have allowed companies to refrain from rushing to scrap loss-making vessels.

Hapag-Lloyd, ranked as the fifth-largest carrier, operates a fleet of 251 vessels, out of which 128 are chartered-in, with a total capacity of 1.8 million TEU, according to Linerlytica. The company also has an orderbook of 17 vessels, amounting to 350,000 TEU, including twelve vessels with a capacity of 24,000 TEU scheduled for delivery over the next two years for THE Alliance’s Asia-North Europe routes.

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