China’s state-owned shipping giant COSCO Group will spend $4.9 billion to expand its fleet in a renewed quest to become the biggest marine transporter on the planet, reports Nikkei Asia. The group will allocate the funds from 2023 through the end of 2025 to bring in 32 container ships, expanding its carrying capacity by roughly 580,000 TEUs (twenty-foot equivalent units).
COSCO had 512 vessels in its fleet at the end of June, amounting to 2.92 million TEUs. If it does not scrap any ships, the investment would boost capacity by roughly 20%. “We’ll use the advantage of our scale to reduce costs and respond to the various needs of our clients,” COSCO Shipping Holdings, the group’s core listed subsidiary, said about the shipbuilding plans.
Behind COSCO’s bet are the company’s long-held ambitions and a booming industry. COSCO in its current form was born out of a 2016 merger of China’s first- and second-largest shipping companies, which was ordered by the Chinese government to raise the competitive advantage of state-owned operations through scale.