Cosco plans to order 11 container megaships despite overcapacity

State shipping behemoth Cosco Holdings has confirmed it will order 11 container megaships for US$1.5 billion, despite an estimated 30% overcapacity in container shipping having sent freight rates to levels that at times don’t even cover the fuel cost of moving containers across oceans, The Wall Street Journal reported. When fully-loaded, such “Triple-E” ships cut that cost by about 25% compared to smaller vessels. Lars Jensen, chief executive of SeaIntelligence Consulting, said concerns about overcapacity were well-founded, but that such vessels were needed to keep up with Cosco’s larger rivals: “Over the next couple of years, any ship carrying below 12,000 boxes won’t be able to compete in terms of cost.”