China's two biggest shipping lines, China Ocean Shipping Co (Cosco) and China Shipping Container Lines (CSCL), are seeking ways to consolidate their individual shipping activities, according to a Cosco source. Senior executives from both companies have talked in the past of the need to work closer together. However, the latest comments followed news of the first slot agreement ever put together between the two companies, and acknowledge that earlier pledges are being put into action.
CSCL has taken slots on the Middle East/Indian sub-continent part of the Cosco/Lloyd Triestino China/Persian Arabian Gulf service, which serves Dubai, Damman and Karachi. Other possible consolidation services cover the Atlantic, South America and Europe/Asia/South Africa.
However, there seems little appetite for a merger of two companies. "We can achieve our best results by consolidation with companies like Cosco. A merger would be complicated," said a CSCL source.
CSCL's biggest market potential currently centres on the Middle East, and associated trade routes such as the Indian sub-continent and east Africa. At Khorfakkan, CSCL will establish its Middle East hub port to serve transhipment potentials on the Asia/Europe service, presently being upgraded with eight 5,500 teu vessels. The new deal with Cosco covers Dubai, Damman and Karachi, and Dubai is a direct port of call on the Asia/America/Thailand service, which also includes Nhava Sheva as a port of call.
In mid-March CSCL told its agents that it could no longer move cargo in the Middle East until the Iraq crisis was resolved.