China Ocean Shipping Co News

According to WSJ report, deals involving Cosco, China Shipping, CMA CGM and Neptune Orient Lines to bring major changes in global shipping alliances. China Cosco Shipping and CMA CGM are hoping to form a new alliance with OOCL, Evergreen Line, and Islamic Republic of Iran Shipping Lines, according to sources in the Chinese shipping industry. According to the Alphaliner, CMA CGM and Cosco are leading efforts to create a new vessel-sharing alliance that could include Evergreen Line and OOCL and would shake up three of the four major east-west carrier groupings. CMA CGM’s plans to bring APL into the O3 Alliance once the NOL acquisition is done has put the spotlight on the G6 Alliance.

The need of the hour is consolidation of container ship lines order to regain profitability and to overcome financial struggles, consulting firm AlixPartners says in a new report. The report says that an increased supply of vessels, coupled with the introduction of giant ships, had met with a dwindling demand in the second half of last year resulting to overcapacity, low profitability and reduced cash flow. The shippers with “M&A on their minds need to be proactive” if they hope to reap the kind of rewards winners in consolidated industries enjoy—or to prevent becoming acquisition targets themselves, the consultants suggested, pointing to the successful consolidation of the US airline industry as a possible template to follow.

China State Council has given the go-ahead for country's two largest shipping conglomerates to merge, continuing a trend in the industry to trim down state-owned enterprises, reports Caixin Media. The China Ocean Shipping Co. (COSCO Group) and China Shipping Group Co. have been working on a deal since August. The listed subsidiaries of the two firms are expected to make separate statements on their next step on December 11, the executive said. Meanwhile, WSJ reported that the shipping companies plan to issue details of their long-expected  multibillion-dollar merger plans as early as Friday, quoting people with knowledge of the matter.

The global shipping industry consolidation appears to be picking up, with much of the activity centering on Asia, reports Nikkei. The overcapacity and weaker global trade have fueled talk of a shakeout in the industry. CMA CGM is in “exclusive” talks with Neptune Orient Lines’ (NOL) largest shareholder, Temask, for the purchase of its APL container liner business. Over in China, the top two state-owned operators are in the final stages of merger talks. NOL announced that CMA CGM had been granted exclusive negotiating rights, through Dec. 7. Singaporean sovereign wealth fund Temasek Holdings, which owns 68% of the shipping company, has been seeking a buyer since early summer. The French suitor beat Denmark-headquartered A.P. Moller-Maersk, the world leader, for pole position.

The merger deal of China’s two shipping gianst China Ocean Shipping Co., or Cosco, and China Shipping Group that could create the world’s fourth largest container operator is expected to get approval by Chinese government by January, reports WSJ. The companies have been working out a deal for months, centered on combining the two companies’ container-shipping units. They are also looking into merging tanker, dry-bulk and port operations, the people said. The tie-up is part of Beijing’s strategy to consolidate state behemoths in many industries so they compete effectively with international peers. In creating a global shipping giant, a merger could also touch off consolidation in the highly fragmented world of container shipping.

State-owned shipping giants China Ocean Shipping Co. (Cosco Group) and China Shipping Group (CSG)  are in advanced negotations on combining their container shipping businesses, reports WSJ. Rumors of a merger deal between the two have been floating for half a year. Both companies suspended trading their shares at the start of August. Discussions are complex and would require government and regulatory approval that has proved difficult to predict. If successful, the deal would create the world’s fourth largest container operator by capacity. In a statement to the Shanghai Stock Exchange, China COSCO  said after market close on October 13 that its trading halt would not last more than another month and it will announce important strategic developments within five trading days.

Brazilian miner Vale SA reached a deal with China Ocean Shipping Co (Cosco) for transporting iron ore, a move that could help the Brazilian miner resolve a costly two-year ban on docking its mega-ships at Chinese ports. Vale said in a statement that it would transfer ownership of four very large iron ore carriers of 400,000 deadweight tons to Cosco. It would then lease them back from Cosco, the state-owned parent of top Chinese dry bulk shipper China Cosco , for 25 years. The deal is part of a continuing effort by Vale to move away from owning its own vessels so it can focus on mining and shore up its balance sheet. But this agreement could also pave the way for more productive negotiations with China over docking Vale's mega-bulk carrier known as the Valemax.

On July 22, Luke Readman, Chairman of Thomas Miller P&I Ltd, will retire after nearly forty years of service to the Members of the UK P&I Club. He hands over leadership to current chief executive Hugo Wynn-Williams, who will be supported by deputy chairman Nigel Carden. Readman became renowned in the P&I industry as an oil pollution specialist after handling major claims for the UK Club such as the 230,000dwt VLCC Haven, which caught fire and sank off Genoa in 1991. The case was finally resolved by a tri-partite settlement agreement between the Italian State, the IOPC Fund and the Owners/Club.

According to a March 11 report from The Wall Street Journal, as global shipping companies struggle amid slumping international trade, China Ocean Shipping Co. is flush with cash, and one of its top leaders says it stands poised to announce record revenue for 2008. (Source: The Wall Street Journal-Asia)

Early last year, “experts” were warning of a prolonged slump in the box trades, fueled by reckless over-ordering by irresponsible carriers and shipbuilders offering special deals on price. Howe Robinson's Container Index had sunk to a low point of 451 in January and leading liner company executives were attending hastily convened crisis summits to discuss possible lay-up schemes and other short-term survival strategies. Less than two years on, the market has paused briefly for breath after what brokers describe as an unbelievable recovery, both in its scale and speed. Last week's Howe Robinson index was just over 1104, slightly down on the previous couple of weeks but nevertheless attained in a consistent climb that, until now, has seen no breaks.

Kawasaki Heavy Industries Ltd plans to draw business tie-up with China Ocean Shipping Co (Cosco) to build one of the largest shipbuilding facilities in China, The Journalo said. The joint venture to be based in Dalian is expected to start operation in 2010. China's leading marine transporter Cosco would hold between 70 and 80 percent of shares in the venture, with the rest owned by Kawasaki Heavy. The two companies expect the joint venture to double the output capacity from the current 650,000 gross tons to 1. 5 million gross tons at the new facilities. Sourc: Journalo