ZIM to charter five additional LNG-fueled container ships by 2024

Israeli shipping firm ZIM said Sept. 1 it would charter five additional LNG-fueled container ships to be delivered in the second half of 2024, bringing its future fleet to 15 LNG vessels as it seeks to reduce its carbon footprint.

ZIM will be chartering the 7,000 twenty-foot equivalent unit capacity ships from Hong Kong-based shipowner Seaspan Corp., exercising its option to expand its long-term charter to 15 LNG-fueled ships from the initial 10 ships at a cost of more than $750 million under an agreement made in July, the company said.

The first of the 15 ships will be delivered in H2 2023.

"This transaction demonstrates our deep commitment to the environment and to reducing our carbon footprint," ZIM CEO Eli Glickman said. "We continue to invest the resources necessary to be an industry leader and to prepare ourselves for the cleaner future of our industry."

ZIM joins several major European shipping lines in ordering ships capable of running on alternative fuels as the order book swelled for the years ahead amid record profits. France's CMA CGM ordered 12 LNG-fueled ships of 13,000-15,000 TEU capacity for 2023-24 delivery, while Germany's Hapag-Lloyd ordered six massive 23,500-TEU ships that will be capable of running on LNG or conventional VLSFO for delivery from 2024.

LNG fuel reduces carbon emissions by around 25% compared with conventional fuels, but leakage from its extraction has been cited as a source of other harmful greenhouse gases. Denmark's A.P. Moller-Maersk has instead opted to order eight 16,000-TEU ships for delivery from 2024 capable of running on environmentally friendly renewable methanol or convention VLSFO, if necessary.

ZIM reported an EBITA of $1.34 billion for second quarter 2021, up from $145 million for April-June 2020, as pandemic lockdowns fueled an unprecedented surge in demand for consumer goods and container carrying capacity. Profits for major shipping lines are expected to exceed a combined $100 billion for the full year 2021, according to shipping intelligence provider Alphaliner.

The Platts Container Index, a weighted average of Platts' key global routes, was assessed Sept. 1 at $7,483 per forty-foot equivalent unit, up 370% on the year.