The Chinese firm is now largest shipping company in the world and controls the fourth largest container fleet after Maersk Line, Mediterranean Shipping Co. and CMA CGM.
China COSCO Shipping Corporation Limited, the new company formed through the merger and restructuring of China’s two largest shipping companies, was officially established on Thursday, according to a report by China’s Xinhua news service.
The combination COSCO and China Shipping at the behest of the Chinese government will create the world’s largest shipping company with 610 billion yuan (U.S. $93.6 billion) in assets.
According to London-based VesselsValue Ltd., those assets include 830 owned ocean-going ships, valued at $21.6 billion.
The company will have a diversified fleet and terminal operations, but its containerships alone will make it the fourth largest container shipping company in terms of carrying capacity after Maersk, Mediterranean Shipping Co. (MSC), and CMA CGM.
COSCO and China Shipping just prior to the merger had 291 owned or chartered containerships with carrying capacity of 1.56 million TEUs, according to industry analyst Alphaliner.
Xu Lirong, current chairman of China Shipping, will become chairman of the new company, which is headquartered in Shanghai.
The restructuring will integrate the resources and talents of COSCO and China Shipping and achieve economies of scale, Xu said, noting that the new company aims to be the global leader in shipping, integrated logistics and related financial services.
COSCO and China Shipping are “under relatively heavy pressure” due to the downturn in shipping and fierce competition from foreign rivals that have carried out mergers and restructuring to gain advantages, he told Xinhua.
Xu said he viewed the deal as a boost to China’s influence in the global container shipping market, adding that the world’s top three container shippers, all Western companies, now control 40 percent of global capacity, while Asia accounts for 70 percent of the world’s container freight volumes.
The official launch of the combined companies comes after a report earlier this week by the Alphaliner information service that the new Chinese company’s container arm may form a new alliance with France’s CMA CGM, which announced in December it would acquire APL parent Neptune Orient Lines), Evergreen Line of Taiwan and Hong Kong-based OOCL.
CMA CGM in a response to American Shipper said “We do not comment on market rumors” and Evergreen spokesperson Barbara Yeninas, also said Evergreen “does not comment on speculation.”