No rigid bet on a single end state. Future-readiness is prepared.
Stranded asset risks and premature fuel commitment.
It demonstrates how technical foresight and capital discipline can be combined.
Adopt the logic: where does prepared future-readiness pay off.
Ocean Network Express (ONE) — founded in 2018 through the merger of the container shipping operations of NYK, MOL and K Line — has in recent years established one of the most noteworthy newbuilding programmes in the industry. What distinguishes this programme from straightforward replacement procurement is the deliberate mix of committed propulsion decisions and open options.
Specifically, the ONE programme encompasses orders for container vessels across various size classes — from 13,000 to over 24,000 TEU — at different yards in South Korea and Japan. The critical aspect is the propulsion structure: one portion of the vessels is ordered with LNG dual-fuel propulsion, one portion with methanol-ready specification and one portion as conventional VLSFO units with structural preparation for later conversion.
This structure is, at its core, a portfolio strategy. The LNG units cover the currently available fuel and reliably meet CII requirements for the coming years. The methanol-ready units keep the option open to switch to green methanol once availability and price justify it. The conventional units secure short-term fleet capacity without paying disproportionate premiums for dual-fuel systems.
Technically, methanol-ready means: the vessels are built with sufficient tank volume, prepared piping routes, reinforced foundations for later tank systems and an engine platform permitting the installation of a dual-fuel kit. The additional cost compared with a purely conventional specification typically lies between 3 and 8 per cent — substantially less than the 15 to 25 per cent for a complete dual-fuel system from the yard.
The hedging logic lies in the timing: ONE does not need to commit to the ultimate fuel today but can defer the decision for a portion of the fleet by 5 to 8 years. In a phase where neither methanol availability nor ammonia maturity is predictable, this optionality constitutes a considerable strategic advantage.
The ONE model demonstrates that fuel readiness is not a panacea but a tool with clear advantages and limitations. The decisive point: readiness is only valuable if the later conversion is actually feasible and economically sensible.
In practice, readiness concepts fail at three junctures: first, when the structural preparation is insufficient — for instance, when tank spaces are allocated but not dimensioned at the required size. Second, when the engine platform does not permit a cost-effective conversion — some engines require complete replacement rather than a conversion kit. Third, when yard capacity for the later conversion is not secured — repair yards are not configured for large fuel-system retrofits.
Owners should therefore scrutinise readiness specifications: what specific structural preparations are contractually defined? What conversion costs are realistically to be budgeted? Is there written confirmation from the engine manufacturer that a conversion kit will be available? Without this substance, readiness is an empty shell.
Compared with the other top carriers, ONE's hedging approach becomes particularly evident. Maersk committed early and decisively to methanol as its primary future fuel. This is a clear bet that pays off if green methanol is available in sufficient quantity and at competitive prices by 2030. If not, Maersk carries higher costs for infrastructure that is not fully utilised.
CMA CGM has invested heavily in LNG as a bridge fuel whilst simultaneously ordering methanol-capable newbuildings. This approach sits between Maersk's commitment and ONE's portfolio — it secures current operations through LNG but keeps the door to methanol open.
ONE's model is the most conservative of the three: it avoids one-sided dependencies but has the drawback that ONE does not benefit from the first-mover advantages that Maersk achieves through early methanol offtake agreements and media presence. For a carrier whose three parent companies, as traditional Japanese enterprises, prioritise capital discipline, this approach is nonetheless consistent.
The choice between hedging and full commitment depends on the following factors:
Fuel availability: If a fuel is already available in large quantities and the price structure is foreseeable, this favours commitment. Under high uncertainty, hedging is more sensible.
Capital structure: Hedging requires lower upfront investment but potentially higher later conversion costs. Commitment demands higher initial investment but offers lower unit costs over the long term.
Regulatory pressure: The stricter and earlier regulatory requirements take effect, the greater the weight of commitment — because readiness concepts carry the risk that conversion comes too late.
Negotiating power: Large carriers can secure volume discounts and preferred delivery terms through commitment. Smaller operators with less negotiating power tend to benefit more from the flexibility of hedging.
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