Merger of the age completed: in chine, it was declred the foundation of China Cosco Shipping Corporation
On the Seventeenth of February this year, in Shanghai, the establishment of new company - China Cosco Shipping Corporation was solemnly proclaimed, the result of the merger of China Ocean Shipping Company (Cosco) and China Shipping Group
The new corporation came into existence in the difficult times for shipping, when the excess tonnage of the world fleet resulting in low freight rates prevents the companies to develop successfully. One of the most common patterns of survival in such conditions is business amalgamation, an example of which was the merger of Cosco and China Shipping. The Government of China, which initiated the consolidation, believes that it would be beneficial for the competitiveness of both companies.
Joint fleet of China Cosco Shipping includes 832 vessels with a total value of $ 21.9 billion. This fleet will be a serious competitor to such giants as the Danish company Maersk or Japanese Mitsui O.S.K. Lines and NYK Line, if we talk about the Asian region. The total capacity of container ships owned by China Cosco Shipping is about 1.56 million TEU - new corporation ranks fourth in the world container fleet capacity. Previously, Cosco and China Shipping were ranked sixth and seventh respectively
However, China Cosco Shipping is going to become soon not the fourth but the third container carrier in the world. To this end, the management plans to increase the total capacity of the fleet on 500.000 TEU, so that it exceeds 2 million TEU by the end of 2018. Now the third place by fleet capacity is occupied by the French company CMA CGM with a fleet of 1.8 million.TEU. The second place belongs to the Mediterranean Shipping Company (2,7 million TEU.), and the first one is owned by unattainable Maersk Line (more than 3 million TEU.).
The management of China Cosco Shipping identified priority areas of development with the pattern "6+1": fleet, logistics, finance, equipment, sea carriages, nationalized industry, as well as activities on the Internet, and business innovation. The headquarters of the corporation headed by Chairman of the Board of China Shipping Xu Lirong will be located in Shanghai. The company's assets are estimated at $ 93.6 billion.
The establishment of China Cosco Shipping was announced when CMA CGM had just started the negotiations with Cosco about joint alliance, where it planned to attract Taiwanese company Evergreen and Hong Kong Orient Overseas Container Line (OOCL). The emergence of this association could lead to the destruction of three other Eurasian alliances - Ocean Three, CKYHE and G6.