Kawasaki Kisen Kaisha Ltd. said it may take as long as a year to decide on plans for adding larger vessels, even after its two main domestic rivals signed deals to add big box ships.
“We’re not in a hurry,” said Jiro Asakura, who became president of Japan’s third-biggest container line last month. “We will use large containerships in line with the industry trend, but we’re going to think about when and how.”
The delay will let the company assess the market and work out the best mix of chartered and purchased vessels, Asakura said in an interview in Tokyo on Wednesday, without elaborating on how many ships it may look to add.
In the past two months, Mitsui O.S.K. Lines Ltd. and Nippon Yusen K.K. have both agreed to contracts for vessels that carry more than 10,000 containers to help pare operating costs.
“Larger ships are more fuel-efficient, but they are very difficult to fill,” said Ryota Himeno, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. “It may pay to take your time and ensure you have the customers for the extra capacity.”
A total of 167 vessels able to carry 10,000 20-foot (6.1-meter) containers or more are on order worldwide, according to data from shipbroker Clarkson PLC.
K-Line’s container unit accounts for about 45 percent of sales at the company, which also operates commodity vessels and car transporters.
The company’s shares have tumbled 22 percent this year, compared with a 17 percent decline for Nippon Yusen and a 22 percent drop for Mitsui O.S.K.
In its dry-bulk business, K-Line plans to sell “a few” of its 80 capesize ships due to plunging rates, Asakura said, noting the ships to be shed, so named because they are too big for the Suez or Panama canals, will be among the 10 the line runs in the spot market.
Shipping lines also face higher costs after fuel prices jumped 54 percent in the past 12 months along with oil prices. K-Line’s container arm plans to raise rates by $300 per 20-foot box on European routes from Aug. 1.
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