Wan Hai Decides To Scrap 10 Older Vessels With A Market Turn

Wan Hai Lines has become the first liner operator to take a big step to reduce its tonnage overhang.

The Taiwan-based firm is putting up ten older vessels for scrap and is inviting cash purchasers to submit tenders by 16 December.

The Loadstar reported that Wan Hai is about to sell four 1,088 TEU 160-type vessels that were constructed from 1996 to 1998, the Wan Hai 165, 163, 162, and 161, and six 1,368 TEU, 200-type vessels built in 1994, Wan Hai 225, 223, 222, 221, 216, and 215. They’re the oldest in Wan Hai’s 112-owned shipping fleet.

Wan Hai Lines
Representation Image. Image Credit: Martina Li

The selected purchasers must send vessels to eco-friendly recycling yards that satisfy Wan Hai’s ESG needs.

Wan Hai, currently the 11th largest liner operator, planned on replacing its older vessels in 2020 and ordered 24 3,000 TEU vessels from Japan’s shipyards. The carrier purchased multiple second-hand containers.

However, the Covid-19 pandemic brought about severe logistical bottlenecks worldwide and a massive capacity shortage. Wan Hai delayed demolishing older vessels to provide customers with adequate shipping slots.

VesselsValue estimates that the combined value of the scrapped vessels would be about $43 million.

Wan Hai’s decision to scrap vessels coincides with shrinking cargo volumes and earnings in the container sector. The firm’s Q3 net profit dropped by 37% year on year, to about $718.3 million, even though a higher turnover in the first six months indicated cumulative net profit for January to September was up by 34% year on year, at about $3 billion.

The firm’s GM, Tommy Hsieh, considers Wan Hai to be black in 2022, as half of the contracts with the US-based clients were signed for the long term and are safeguarded by finalized freight rates.

Regional Container Lines, a Thai operator, broke a nine-month-long drought of container vessel demolition in September 2022 as it sold off the 1990-constructed 1,248 TEU vessel named Mathu Bhum for recycling purposes.

About 5,600 fully cellular vessels, with a capacity of 25.5m TEU, are in the firm’s active fleet. Only 77 of these, boasting a capacity of about 121,671 TEU, are aged 30 years. On the other hand, there are 347 units of 533,478 TEUs aged 25 to 29 years and 678 ships of 1.85m TEUs aged 20 to 24 years.

Reference: theloadstar, UKdaily

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