As COSCO Shipping flexes its muscles with the Chinese government’s huge cash injection and aggressive newbuild programme, can it take on Maersk, the world’s biggest container shipping line?
COSCO Shipping Holdings’ huge growth plans have been revealed, thanks to its announcement in November that new funds will be raised to finance a massive newbuild programme. It covers 20 box ships spanning 13,800 to 21,237 TEU in size and follows aggressive port investment by its port subsidiary in container terminals outside China.
COSCO Shipping Holdings will issue new shares to raise up to CNY12.9Bn (US$1.95Bn) of funds. Specialist container information service Alphaliner has reported that state-owned COSCO Shipping, which currently owns 45.47% of COSCO Shipping Holdings’ shares, will conditionally subscribe to 50% of the new shares, meaning its shares will increase to 46.22%. The remaining 50% will be offered to a maximum of nine investors that have not been named.
It clearly shows that the government has flung its weight behind the company’s growth – Alphaliner said that the move amounts to a “direct cash injection by the Chinese government to support COSCO Shipping Holdings’ expansion”.
The shipping group clearly has big plans – could it take on the world’s number one container shipping line, Maersk? As our VesselsValue data shows, COSCO is close – the second-largest container shipping line in the world after Maersk. But Maersk is still some way ahead in terms of live fleet, as – swelled by its recently-acquired Hamburg Süd fleet – it has 303 ships totalling 2.1M TEU versus COSCO’s 156 vessels totaling 1.06M TEU.
But the companies’ orderbooks show a different picture, with Maersk’s (including Hamburg Süd) 20 ships of 227,158 TEU dwarfed by COSCO’s 511,000 TEU over 29 ships (20 of which are to be financed by the new funds described above).
While total fleets (live and on order) show that Maersk is still the leader, with 323 ships of a total of 2.3M TEU versus COSCO’s 185 vessels of 1.58M TEU, the latter’s large newbuild plans have narrowed the gap compared to the current live fleet orders.
• At the time of writing, Maersk’s takeover of Hamburg Süd is due to be completed at the end of 2017 (see pie chart).