Lines

Smash hit

Splash picks out the biggest stories in what has been a banner year for many local shipowners

After more than a decade where Hong Kong’s generally canny owners have kept their heads low, seeking to get through shipping’s lost decade, 2021 has been a banner year for most with container and dry bulk earnings spiking. In general, however, in keeping with the conservative nature of the city’s shipowners there has been little in the way of excess or irrational outlay; the previous tough years have kept this business community on a tight leash.

Pacific Basin

The big news at Pacific Basin, the territory’s listed largest dry bulk operator, was a change at the top with Swedish national Mats Berglund deciding it was time to head home after nine years as CEO.

At the end of July Martin Fruergaard, formerly the CEO of Ultragas took over from Berglund, joining the company at a propitious time where handy and supramax rates - the focus of the Pacific Basin fleet - were hitting highs not seen in a decade. The two men are pictured above playing table tennis on Berglund’s final day in charge. Fruergaard, a Dane, also previously served several senior roles in Maersk Bulk Carriers, Maersk Tankers and Maersk Drilling. Having paused fleet expansion plans at the start of the pandemic, Pacific Basin roared back into action 12 months ago and has been buying plenty of secondhand tonnage, while also getting rid of some vintage units.

OOCL

It’s now more than three years since Cosco completed its buy-out of Hong Kong’s flagship liner, OOCL. The Hong Kong firm still maintains its own identity and is still very much considered a bellwether for container line fortunes. It’s third quarter results - published in early October - paint their own picture of the sky-high, unprecedented times carriers have been through in 2021. OOCL saw revenues grow by 125.3% year-on-year to $4.3bn for the three-month period. The $6.7bn Cosco paid for the then Tung family-controlled carrier has easily been recouped and then some in this stellar year for box shipping.

In September OOCL entered into shipbuilding contracts with two yards belonging to parent, Cosco, for the construction of ten 16,000 teu containerships. The latest deal takes OOCL’s newbuilding orderbook to 22 vessels.

Meanwhile, in August OOCL debuted a landmark new rail-sea service connecting China to the US east coast. The new offering is a combination of the Chang An China-Europe block train service from Xian to Kaliningrad with onward feeder to Bremerhaven, and then with OOCL ocean services from Bremerhaven to various ports on the US east coast. The service is the first of its kind to be operated by an ocean carrier, connecting China and North America by using the Asia-Europe Land Bridge and the Atlantic Ocean.

RECOGNIZED DRY BULK SPECIALISTS

Chellaram

There’s been considerable change at the top for Chellaram controlled brands this year. After 13 years in charge at dry bulk subsidiary KC Maritime, Vikrant Bhatia made way. From June 1, the company’s new chairman, Gautam Chellaram became both chairman and CEO.

The Indian-controlled shipping conglomerate, which has been based in Hong Kong since 1979, added new tonnage this year with two handies - the Darya Heera and Darya Mira - joining the Chellaram Shipping fleet from Dalian COSCO KHI Shipyard.

Wah Kwong

Under Hing Chao, the venerable Wah Kwong brand continues to diversify to offer a suite of China-linked services in addition to its shipowning roots, which now date back 70 years. The company’s shipmanagment division is now pushing 60 ships, while Wah Kwong also develops ever closer ties with China’s top leasing houses.

Chao also founded the Greater Bay Area (GBA) Task Force under the Hong Kong Shipowners Association (HKSOA) and is among the city’s best proponents on the merits of the GBA.

In May, Chao’s sister, Sabrina, took over as president of BIMCO, the world’s largest shipowning organisation.

Valles

The average age of the Valles Steamship fleet came down this year with the arrival of two aframax newbuilds and a brand new LR2 product tanker from Asian yards.

The 104-year-old company, now run by the fourth generation of the Koo family, took the decision two years ago to exit dry bulk. It currently has 12 tankers in its fleet. In March this year, the company also contracted STX Offshore & Shipbuilding in South Korea to construct a 50,000 dwt product tanker.

The policy at Valles in recent years has been to focus on tonnage replacement, something that is unlikely to change anytime soon.

Caravel

The Banga family-controlled trading house recently added a third bulk carrier and has just increased its shareholding in the feeder container segment and is now the largest partner in Tim Huxley-led Mandarin Containers, which has a fleet of five 1,700 teu ships.

Caravel has been growing a great deal, largely under the radar. Today it claims to transport 1% of the world’s containers and 2% of the world’s commodities.

“Considering the growth in the market right now we believe our investments this year are sound and will demonstrate robust returns and continue to keep an eye out for future growth opportunities,” says the group’s founder and chairman, Harry Banga.

Taylor Maritime

It has been a sensational year for Ed Buttery, leading his seven-year-old firm onto the London Stock Exchange (LSE), continuing to grow his handy bulker fleet while enjoying the best rates in more than a decade.

Taylor Maritime Investments’ listing in London was a brave move, there had been no shipping IPOs in the UK capital for many years, yet Buttery rolled his sleeves up and hit the virtual roadshow hard, drumming up support for the launch with snappy, beguiling pitches on prospects for the dry bulk sector. The cash accrued has gone on bulking up the fleet.

“The ultimate goal is not a certain number of ships but to maximise long term shareholder value, protect dividends and to grow them,” Buttery says.

Unique Shipping

Private Hong Kong owner Unique Shipping quit the bulker segment at the start of the year, offloading its one cape, the Unique Carrier for $11.5m. Unique’s ship focus is now on its 12 tankers - a mix of gas and product carriers. Unique Shipping was established in 1966 as a private shipowning and management operation and has since then acquired over 100 vessels over the years. The company is now led by Edward Cheng, the eldest son of the founder.

China Merchants Energy Shipping

2021 has been a year of fleet rejuvenation for mighty China Merchants Energy Shipping (CMES), one of the world’s largest shipowners.

The state-backed Chinese carrier has been offloading a series of non-eco ships while on the shortsea segment it has also been pruning its multipurpose fleet in order to have an asset light approach to this particular business division. The company has also been active in contracting newbuilds, most recently sealing a deal with Dalian Shipbuilding Industry Co for an aframax to be delivered in 2024.