A strategic agreement between China Shipping Group and the Industrial and Commercial Bank of China could help the company become more competitive in the container shipping market.
China Shipping Group, which is comprised of China Shipping Development, China Shipping Container Lines and China Shipping Haisheng, will work with the ICBC on nearly all financial moves, including risk management and strategic investments, to advance the companies’ competitiveness. According to SeaTrade Global, the deal is valued at $13 billion.
The Chinese government announced a series of subsidies and new policies that would revive state-run shipping companies in early September. Three weeks later, on Sept. 30, the country doled out $293 million to several shipping companies. Though Cosco Shipping and China Cosco took the lion’s share of those subsidies, $35 million went to China Shipping Development Corp. and an additional $6.5 million was given to CSCL.
The two companies will spend a large portion of that money on ship scrapping, but it is also earmarked for the building of new, more environmentally friendly vessels and various other ship upgrades.
The group of companies also is set to benefit from a partnership with e-commerce giant Alibaba, which tapped the China Shipping Group to set up integrated cross-border logistics platforms to help establish Internet shopping on the mainland.
CSCL, CMA CGM and the United Arab Shipping Co. joined forces in early September to create the Ocean Three Alliance, which would cut unit costs as the three carriers share costs. CSCL is awaiting delivery of five 19,000-TEU-unit ships, which will be the largest container vessels afloat. According to Alphaliner, CSCL is seventh on the top 100 carriers list in terms of TEU capacity, deploying 3.4 percent of the global fleet.
Source: JOC. 13 October 2014