In order to increase its geographical footprint across the globe and expand its business, the UAE-based United Arab Shipping Company (UASC) is forging new alliances with other companies and going for new ships to cut fuel emissions.
The company has ordered 17 new ships to be built and press into service in the next two years. The first ship will arrive by the end of November marking a new era in the shipping industry because of the fuel efficient technologies of the ships, Chief Trade Officer, Lars Christiansen told Gulf News.
“The new ships are environment-friendly and are Liquefied Natural Gas (LNG) ready, which means they can be converted easily to run on LNG once the bunkering facilities are available. Though the new ships cost us more when compared to normal ships but returns are good. They adhere to environment standards laid down by the US and European Union,” said Christiansen.
The company has spent more than $2 billion in building new ships by Hyundai Heavy Industries HHI in South Korea. The order is the largest in UASC’s history, and includes eleven 14,000 Twenty Foot Equivalent Unit (TEU) vessels and six 18,000 TEU vessels.
The ships will be 400 meters long and 58 meters wide with a draught of 16 meters and will be among the largest container ships to sail the oceans.
In order to expand their business, the company has been going for major alliances with other shipping companies in recent times.
Last month, it signed a co-operation agreement with China Shipping Container Lines and France’s CMA CGM to form the Ocean Three alliance covering key East West trade routes including Asia-Europe, Asia-Mediterranean, Transpacific and Asia-United States East Coast.
They also inked an agreement with German-based Hamburg Sud that will provide the company a bigger presence in the South-America to Europe and South America to Asia trade.
“The new alliances will help us to further enhance our services and provide customers with additional opportunities and alternatives. It will give us a larger geographical footprint. Ocean Three as example will provide more direct services and less transshipments”
One of the markets the shipping company is targeting is South America. The agreement with Hamburg Sud will give the opportunity to enter South America, Christiansen said.
He said by sharing ships and ports, the company expects to cut operational costs by at least $100 million a year.
According to him, one of the challenges facing the industry is new legislation in parts of Europe and the US to cut emissions.
“This new legislation will increase fuel costs by 50 per cent. More and more countries are demanding cleaner environment. It is a challenge which shipping companies had to overcome in the coming years to increase their profits.”
The shipping company said they are excited about Expo 2020 and see immense business opportunities.
“We expect an increase in the shipping volumes. New real estate projects are popping up and more and more people are coming to the UAE. We are predicting consumer demand to go up helping our business to further grow regionally and internationally”
Christiansen said the global shipping industry is on a path to recovery after many years of slow business.
“We are seeing some early signs of global recovery. The business has been picking up. We are encouraged with the results this year. In the second and most of the third quarter, we operated fully loaded ships in Asia-Europe with demand growing 7 per cent to 8 per cent.”
Founded in 1976, UASC is present in more than 75 countries around the world, covering over 200 ports and destinations worldwide. UASC offers containerized and conventional cargo transportation, temperature-controlled cargo and value-added services to a diversified global client base, covering the Middle East, Europe, Mediterranean, Indian Sub-continent, Far East, Australia, West Africa and The Americas.