OCEAN CARRIER REVIEW - Seaspan Corp.: Swimming with the big boys

By: | at 08:00 PM | Channel(s): Liner Shipping  

By Leo Quigley, AJOTSeaspan Corporation’s early beginnings go back to the Vancouver, Canada, tug and barge group, Seaspan. Established in 1898, Seaspan’s red and white tugs are now a familiar part West Coast scenery, pulling log booms and barges between destinations as far north as Alaska and as far south as Mexico.
Owned by the Washington Group of Boise, Idaho, which now brings in roughly $3 billion a year in revenues, Seaspan has had the financial resources over the years to buy up struggling maritime companies in the Vancouver area and gradually build Canada’s largest maritime transportation entity as well as two ship repair and construction facilities on the West Coast, at Vancouver and Victoria.
But, while the tugboat and ship repair business has proved to be successful, an even larger and globally recognized business venture has emerged from the company’s modest offices on Vancouver’s North Shore.
Seaspan Corporation, a separate company established in 2005, with offices in Vancouver, Hong Kong, the Marshall Islands, Bermuda and India, recently ordered four 4,250 teu ships from China’s Jiangsu New Yangzi Shipbuilding Co., Ltd., which will bring the total number vessels owned or on order to 47 container ships: with 26 already in service and an additional 21 to be delivered over the next three years.
As with other Seaspan containerships, these vessels have already been assigned to an existing firm. In this case, the ships have been chartered to Compania SudAmerica de Vapores SA (CSAV) for a six-year period. Other firms that have signed long term charter agreements with Seaspan Corporation include: China Shipping Lines, A.P. Moller-Maersk, Mitsui O.S. K. Lines, Hapag-Lloyd, COSCO Container Lines and “K”-Line.
According to a published statement by Seaspan Corp. CSVA will pay $29,925 a day for use of the ships. In addition, Vancouver-based Seaspan Management Services Limited will supervise construction and operate the ships at a fixed rate of roughly $4,725 per day. Seaspan Management Group Limited continues to be owned by the Washington Group. However, Gerry Wang, CEO of Seaspan Corporations owns half of the management unit.
In making the announcement Wang said: “Adding the premier South American shipping line to our customer portfolio is another significant step in the geographic diversification of that portfolio.”
Seaspan’s 25th. ship, the 3500 teu. Cosco Fuzhou, was delivered March 27 of this year by Zhejiang Shipbuilding Co., Ltd. to go into service for Cosco Container Lines Co., Ltd, while the 26th. ship, the 4250 teu Rio De Janeiro Express, was delivered March 28 by Samsung Heavy Industries Co., Ltd. to go into service with the Hapag-Lloyd USA fleet.
As with other Seaspan new builds, these ships are designed for maximum performance, optimum speed, fuel efficiency and loadability.
“The ship-owning part of the business dates back to 1999 when the group placed an order for five ships at the Samsung yard in Korea,” Kevin Kennedy, Chief Financial Officer, told AJOT.
“The concept originated with Gerry Wang, who was working as a broker between Chinese shipping companies and shipping companies and shipyards outside of China” he said. “There were three classes of ships. The initial group of five were all 4,250 teus. The second group of 18 that was ordered in 2002 – 2003 consisted of 14 ships with a 4,250 teu capacity, two were 8,500 teus and the last two were 9,600 teus.
“The lease arrangement is a time charter where we provide all of the day-to-day operating services for the ships and our customer tells us where the ship ought to be at a particular time and it’s our job to get them there.”
While Seaspan Corporation may not be the largest chartering company in the world, Kennedy places it among the top 10 with one of the newest fleets available.
One of the trends at Seaspan Corp has been the move to increasingly larger ships. At present the company has one 9,600 teu vessel and two 8,500 teu ships. Kennedy said that, to some extent, the move to t

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American Journal of Transportation