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TS Lines eyes scrubbers as it posts higher earnings

TS Lines, the privately owned Hong Kong-Taiwanese intra-Asia carrier, is opting for scrubbers to manage the costs of complying with the International Maritime Organization's global sulphur cap.

The company announced its scrubber intentions when it posted new highs in terms of container volumes and earnings in 2019.

In 2019, TS Lines, named after its founding CEO, Chen Te-sheng, carried over 1.65 million TEU, exceeding the 1.62 million TEU shipped in 2018. Operating profits for 2019 are expected to be TW$1.65 billon (US$54.91 million), more than doubling from TW$660 million (US$21.6 million) in 2018.

TS Lines' management believes that the biggest challenge facing liner operators in 2020 will be the higher fuel costs, which are estimated to rise from US$11 billion to US$15 billion.

Since February, eight of TS Lines' ships have been retrofitted with scrubbers and, in the first half of the year, scrubbers will be installed on two newbuildings and another two chartered ships.

By August, TS Lines will be operating 12 scrubber-fitted ships, which forms a third of its operating capacity, as the company has another 30 vessels on charter. The company's management believes this strategy will be more cost-effective than burning expensive low-sulphur fuel oil.

TS Lines was initially registered in Hong Kong due to Taiwanese restrictions relating to non-vessel owning liner operators. In 2004, TS Lines obtained a secondary registration in Taiwan when it became a shipowner after purchasing secondhand vessels.

TS Lines commissioned newbuildings for the first time in 2015, when four 1,800 TEU ships were ordered from Taiwanese shipbuilder CSBC Corporation. The company now has 10 owned ships, with another two vessels being built at Kyokuyo Dockyard in Japan. The two newbuildings would be delivered in April and July. TS Lines indicated that it may order more ships, due to the shortage of feeder vessels.

Martina Li
Asia Correspondent

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