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Wan Hai earmarks US$360 million for second-hand ships

Wan Hai Lines' directors said on 7 December 2020 that the company is considering purchasing more second-hand ships and has set aside a budget of US$360 million for the purpose.

Wan Hai confirmed on the same day that it had purchased the 2010-built 4,178TEU Teal Hunter from Belgian shipping group Compagnie Maritime Belge (CMB), for US$18.25 million. This year, the Taiwanese intra-Asia shipping specialist has already purchased five second-hand ships, including two Neo-Panamax 11,923TEU units from PIL, spending over US$240 million.

In a filing to the Taiwan Stock Exchange, Wan Hai said that it has tasked its Singapore subsidiary, Wan Hai Lines (Singapore), to undertake the procurement. This may be due to tax exemptions offered to major shipping enterprises in Singapore.

Wan Hai said that several 1,800TEU and 8,500TEU second-hand vessels are being considered.

It is obvious that Wan Hai is optimistic about the firming market and does not want to wait for new ships to be built. Pre-owned ships can quickly join the company’s fleet without the staff having to spend time on newbuilding design and supervision. Charter rates have also been rising and expanding its owned fleet enables Wan Hai to manage its costs.

Now the 11th largest liner operator, Wan Hai owns 66 ships of a combined 161,879TEU, with another 49 vessels of 154,034TEU on charter.

Amid the Covid-19 pandemic, the container shipping industry experienced a V-shaped recovery as carriers enforced capacity discipline by blanking sailings, causing rates to soar to 10-year highs.

In addition, there is a shortage of containers as the lack of Transpacific backhaul cargoes slowed the return of empty boxes. As a result, Wan Hai is also spending US$109 million on 37,000 new containers.

Martina Li
Asia Correspondent

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