Container and bulk capacity highlight the programBy Peter A. Buxbaum, AJOTGlobal economic growth, and particularly the growing trade between China and Japan, is spurring Mitsui O.S.K. Lines, to invest $5.3 billion over three years on new investments in vessels, containers, and facilities. MOL, one Japan’s largest ocean shipping lines, is an integrated carrier that transports containers, bulk cargoes, and vehicles. The company is making the investment to “increase capacity to meet global trade growth” and to “upgrade our fleet by replacing old, inefficient ships,” according to Osamu Suzuki, President/CEO and Chairman of MOL (America) Inc. Last year, the company announced plans to buy or lease 287 ships to bring its total number of vessels to 900 by March 2010. In addition to increasing its container capacity, MOL is also enhancing its bulk fleet, in large part in order to accommodate increasing mineral exports to China. Suzuki expects consistent trade growth in the range of eight percent to twelve percent per year through 2009 in the transpacific and Asia-Europe trade lanes. This represents one of the key factors MOL considered in developing its investment program. In addition to increasing capacity and upgrading its fleet, Suzuki said that MOL will also be increasing its “capacity to meet growth in the existing North-South and intra-Asia trade lanes,” and will also be “enhancing its service network to meet customer demand in new and underserved trade lanes where we anticipate a reasonable return on our investment.” MOL will also be investing in “new containers to meet fleet capacity growth” and will be replac[ing worn-out containers,” according to Suzuki. The company is also considering investing in new “container terminals and inland container facilities where self-operation is considered crucial to sustain service- and cost-efficient liner operations,” he added. On the container side, MOL will take delivery through 2009 of over 30 new container vessels with a variety of container capacities between 1,000 and 8,100 teus. “New vessels will be owned, long-term chartered, or leased as appropriate when the ship building contract is signed,” Suzuki said. MOL also announced on May 31 that it will be deploying 43 new bulk vessels, ranging in size between 80,000 and 300,000 deadweight tons between 2006 and 2010, to be devoted largely to carrying iron ore. MOL’s bulk capacity strategy is designed to capture as much as 15% of the global iron ore transport market, or around one billion tons annually, according to a company announcement. Strong growth in the Brazilian, Russian, Indian, and Chinese economies has led to increased production volume of and demand for crude steel in these growing regions. China, also, is expected to increase its imports of iron ore. “MOL, as the world’s leading operator of Cape-size ore carriers, offers a full range of vessels to meet diverse customer needs in this expanding trade,” the company said. Attaining service and cost efficiencyThe number of MOL-operated vessels involved in iron ore transport currently totals 114, including Cape-size and Panamax bulkers, as of March 31, 2006. The new expansion plan will bring the fleet to total 140 vessels, including 110 Cape-size and 30 Panamax, by the end of 2009. Ships on short-term contracts and spot charters will increase the fleet to some 150 vessels. The new ore carriers will include three 300,000 dwt vessels, eleven 230,000 dwt, ten 200,000 dwt, six 170,000 dwt, eight 110,000 dwt, and five 80,000 dwt vessels. MOL’s enhancements to its container capacity will be less directed toward the Japan-China trade. Between 2005 and 2009, the size of MOL’s container operating fleet will increase from 87 to 117 vessels, according to Suzuki. “To attain service and cost efficiency, new vessels will typically be larger than existing ones,” he said. “Our main fleet serving the Asia-United States West Coast trade will average about 6,300 teus, while 8,100 teu ships will largely be used to ser