By Brian Dunn

When Atlantic Container Line (ACL) put out the call for the construction of the five largest RORO/Containerships (CONROs) in the world, very few answered the call, or were not up to the task.

“We started with 17 shipyards. Many were reluctant to bid as they felt five ships weren’t enough to achieve economies of scale. Others felt the design was too complicated, while the Korean yards were too expensive” said ACL President and CEO Andrew Abbott during a webinar to unveil the Generation 4 (G4) vessels that will replace ACL’s existing fleet of G3 CONROs operating in the company’s transatlantic service. New Jersey-based ACL finally settled on state-owned Hudong-Zhonghua Shipbuilding of Shanghai. “They are very professional and specialize in naval ships so they are used to complicated designs,” noted Mr. Abbott.

The new ships will continue to employ cell-guides on deck, a feature that will allow ACL to keep its record intact of never having lost a container at sea since 1984, according to Mr. Abbott. All five vessels will be delivered in 2015.

The innovative design of the G4s was developed by International Maritime Advisors (IMA) of Dragoer, Denmark, which solved the problem of high ballast on CONRO vessels. Hudong commissioned Knud E. Hansen of Helsingor, Denmark, to adapt the IMA CONRO concept to ACL’s requirements.

Standard CONRO vessels stow containers on deck and lighter RORO cargo underdeck, explained Mr. Abbott. Because of the  significant air space that normally occurs on RORO decks compared to the denser stowage of containers, most of the weight rides high on a standard CONRO vessel, requiring a great deal of ballast for stability. IMA developed the concept of putting all the RORO cargo midships and stowing the containers in cells fore and aft of the RORO section. This results in cargo replacing ballast and much more efficient use of vessel space. The bridge on the G4s has also been moved from the stern to midship, allowing containers to be stacked higher in the stern. The end result is a doubling of container capacity.

The G4s are almost the same scale as the G3s in terms of draft and length, with a significantly larger capacity. In terms of containers, the G3s have a capacity of 1,850 TEUs versus 3,800 TEUs on the G4s, which can also handle 1,307 cars versus 1,000, and RORO space of 28,900 square metres vs. 18,500 square metres

“The new vessels will also have a car deck height of 2.2 metres compared to 1.65 metres, which will allow us to carry (more and bigger) SUVs which are a significant portion of our cargo,” said Mr. Abbott. Overall deck height will be 7.4 metres, up from 6.2 metres.

In addition, the G4s will only require a crew of 16, down from 21 on the G3s, cruise at 18 knots vs. 16.5 knots, burn 70 tonnes of fuel per day instead of 75 tonnes and will carry 82 TEUs for every tonne of fuel compared to 41 TEUs on the G3s.

ACL, which is a division of the Grimaldi Group of Italy, will either scrap its G3s or sell them to a government agency such as the U.S. military. Assuming ACL will find clients to occupy the increased number of available slots, the G4s will boost ACL’s market share of the (non-military) weekly U.S. Atlantic container market to 9 per cent, up from 4 per cent, potentially moving the company into fourth spot, up from ninth position, according to Mr. Abbott. It will also potentially increase its leading RORO market share to 18 per cent from 12 per cent.

“The G4s will still look like a normal container ship, but we’ll be competitive with anyone else out there in terms of cost with better fuel efficiency,” he added.

While he wouldn’t reveal how much ACL is paying for the vessels, Mr. Abbott said the price is “much lower” that the original $140 million to $150 million figure when negotiations started a few years ago. About 30 to 40 per cent of the money will come from internal financing and the rest from bank loans. Some of the funds could also come from the sale of the G3 fleet.

Asked about the greatest competitive advantages the G4s have to offer, Mr. Abbott said that they will employ the latest technology with a much larger RORO component and will be able to carry more cargo with a 7.4-metre deck. It will also be easier to maneuvre cargo as there is only one row of columns on the G4 RORO decks versus multiple columns on the G3s. “And with only 1,850 TEUS, we had to put many of our customers on allocations. But with the G4s, we can take everything our customers are offering us.”

But in order to fill the bigger ships, ACL needs to extend its scope beyond the U.S. and Canadian East Coast where it calls on Halifax, New York, Baltimore and Norfolk. It is looking further South to add either Charleston, Savannah or Jacksonville. “If we add one of those, we have to pull out somewhere else, either in North America or Europe, or we could go from a double-call service down to a single-call,” said Mr. Abbott. Even if ACL were to pull out somewhere, the company would like to continue servicing that port, either through Grimaldi or through its partnership with Hapag-Lloyd or both. And with the bigger ships, ACL would also like to double its swap-charter agreement with Hapag-Lloyd to 1,000 TEUs.

“We treat them as our best customer and they treat us the same way. We’d like to get more involved with places like Montreal, where we don’t call. We used to through Canada-Maritime, but we were buying those swaps. Hapag-Lloyd doesn’t charge us and we don’t charge them.”

As for ACL’s overall business, Mr. Abbott said it has managed to weather the storm and remains profitable. “Westbound trade is relatively stable, although the Eastbound market is more nervous with the euro. If things hold, we could put in a rate increase in the fourth quarter.”