SHIPPING and port giant China COSCO Holdings Co. is set to order at least 10 container megaships, joining an array of competitors in their quest to dominate the world’s busiest ocean trade routes, sources with direct knowledge of the matter said yesterday.

    The so-called Triple-E vessels, which can move 19,000 containers each, will be ordered from a Chinese yard and will cost a total of roughly US$1.4 billion.

    “COSCO is in the final process of choosing among five Chinese yards and we may get the firm order by the end of May,” the sources said. “The ships will be deployed in the Asia-to-Europe trade loop.”

    The sources said COSCO had so far been reluctant to follow bigger competitors — including the Maersk Line unit of Denmark’s A.P. Moller-Maersk A/S, and Switzerland-based Mediterranean Shipping Co. — that already have a number of such behemoths in their fleet.

    “They had and still have concerns on whether they will be able to fill them,” the sources said. “But megaships are imperative if you are to compete going forward.”

    Fully loaded, Triple-Es cut the cost of moving a container across the oceans by about 25 percent, and industry executives say smaller operators that can’t afford to buy them will increasingly lose market share on the biggest trade routes.

    Container shipping, which carries about 95 percent of the world’s manufactured goods, has suffered over the past decade from overcapacity that has led to falling freight rates, which major operators have described as unsustainable.

    COSCO is the lead member of the CKYHE alliance, which also includes Taiwan’s Evergreen Line and Yang Ming Marine Transport Corp., Japan’s Kawasaki Kisen Kaisha Ltd. and South Korea’s Hanjin Shipping Co. In January, Evergreen ordered 11 Triple-E ships. (SD-Agencies)