Maersk inks deal to scrap eight vessels

Maersk inks deal to scrap eight vessels

Ship line says all recycling will abide by responsible ship recycling standards.

December 19, 2016

Maersk Line, the largest container shipping line in the world, has signed an agreement to have eight of its vessels scrapped by ship recycling companies in India and China. The vessels to be scrap are all Panamax vessels.

As part of the agreement, the ship recycling firms have agreed to process the vessels in full agreement with the A.P. Moller - Maersk Responsible Ship Recycling Standard (RSRS).

The ship line adds that it expects to recycle a larger number of vessels than in previous years as more of its vessels are coming to their economical end of life. At the present time Maersk Line has a fleet of more than 600 vessels that it owns and charters.

In November, Maersk Line and Maersk Transport & Logistics Sustainability selected five ship recycling facilities in China and India for a tender to recycle eight Panamax vessels. All the ship recyclers agreed to the A.P. Moller - Maersk Responsible Ship Recycling Standard (RSRS) as a prerequisite to enter the tender.

“These vessels represent roughly 1 percent of our fleet, so this is a small but meaningful capacity reduction, which will contribute to achieving a better balance between supply and demand for Maersk Line,” says Maersk Line COO, Søren Toft.

“The cost of replacing the vessel – hereunder its operational profile, its segment fit and how this segment is covered within the needs of our network – also impacts our considerations as to whether to recycle a vessel. Finally, external factors such as steel price developments and global or regional trade outlooks play a role in our decision making process,” says Peter Lund, head of chartering at Maersk Line.

In India, four vessels will be recycled by Shree Ram; Y.S. Investments, a part of The Lucky Group, will process two other Maersk vessels.

Recycling supervision will be carried out by Maersk QHSE superintendents and external consultants to ensure responsible ship recycling operations according to the A.P. Moller – Maersk RSRS.

“Since our first vessels arrived in Alang (India) earlier this year, we’ve seen significant progress; at the facility we are working with now, at the facilities that will recycle these next four vessels, and even at other facilities that have been encouraged to invest and upgrade,” says Annette Stube, head of sustainability for Maersk Transport & Logistics.

The remaining four vessels will be recycled at Changjiang Ship Recycling, located in Jiangyin, China, a Lloyd’s Register certified facility. Supervision of the scrapping will be carried out by Sea2Cradle.

“With this tender, we have for the first time seen that the ship recyclers compete not only on price, but also on standards. This indicates a move towards higher standards, and we will continue to encourage this development,” says Stube.

Estimated transfer dates of the vessels to the ship recycling yards are between the middle of December 2016 and the middle of March 2017.