CSCL and COSCON will restructure and integrate in order to reshape China's shipping industry

CSCL and COSCON will restructure and integrate in order to reshape China's shipping industry and become one of the top four container shipping giants in the world. The company will combine its quality resources to achieve synergies and provide better service.

On December 11th, China Shipping Container Lines (CSCL), China Shipping Development (CSD), China COSCO, and COSCO Pacific announced plans to restructure key assets, kicking off the SOE reforms in China's shipping industry.

The restructuring and consolidation will create one the world's four largest container lines companies, with a fleet of 288 container ships, including 84 ships with a shipping capacity of more than 8,000 TEU, and total shipping capacity of approximately 1.6 million TEU. This integration will help the company combine its quality resources to achieve synergies and provide better customer service.

CSCL will achieve business transformation by leasing ships and container boxes and acquiring the leasing business held by COSCO and China Shipping; and injecting other ship financing business and assets. COSCO Container Lines (COSCON), a subsidiary of COSCO, will rent CSCL's assets, including ships and container boxes etc., and divest its bulk shipping business. COSCO Pacific will buy the port assets of China Shipping and CSCL in order to integrate container shipping and port businesses.

As the leading companies in China's shipping industry, CSCL and COSCON have cooperated with each other for years. The company will greatly improve the new company’s core competence after the restructuring and consolidation. For its investors, the integration of quality resources and capture of the synergies can bring better investment return; for its customers, expanded shipping capacity and widened scope of the business will optimize its route network, and improve the fleet structure, and thus enhancing its ability to deliver higher quality customer services and meet more rigorous service standards; for its suppliers, it provides a better platform with even more cooperation opportunities. The restructuring and consolidation will also offer its employees more diversified career development opportunities.

CSCL and COSCON expect to start the business integration by beginning of next year. The company will take a phased approach on the integration of customers and routes, to ensure smooth transition and stable service delivery.

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