South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) has won a KRW903.9bn ($760m) contract from Swiss Mediterranean Shipping Company (MSC) to build five ultra-large box ships.

According to the agreement, the South Korean firm will build ultra-large container vessels with a capacity of approximately 23,000 twenty-foot equivalent unit (TEU).

The latest contract is an option that MSC exercised as part of an 11-vessel contract signed with DSME in September 2017.

Scheduled to be delivered by 2021, the new ships are expected to be deployed on the Asia-to-Europe trade route that is considered to be the world’s busiest ocean container lane.

Container ships transport various manufactured goods such as cars, electronics furniture and home appliances.

The fully loaded ship’s fuel consumption for one container is a quarter that of a smaller vessel’s.

Currently, the ocean cargo trade is facing a number of challenges such as decreasing freight rates.

As a result of the weak global ocean trade, big shipping companies such as A.P. Moller-Maersk, MSC and Cosco Shipping in China are competing on their pricing.

In June, Oman Shipping Company (OSC) awarded a contract to DSME to construct three very large crude carriers (VLCCs).