As more shipping companies seek partnerships to gain economies of scale and market share, Chinese carriers China Cosco Holdings and China Shipping Container Lines (CSCL) have taken steps toward firmer ties in an effort to sharpen their competitive edge.
Beijing-based Cosco and Shanghai-headquartered CSCL signed a “strategic cooperation framework agreement” on February 13 establishing a comprehensive strategic partnership and a resource-sharing mechanism in shipping, terminal operation, logistics, shipbuilding, and ship repair.
“The agreement will help the two companies achieve advantage complementation and coordinated growth, and be better prepared for industrial changes, so as to improve the influence of Chinese shipping companies in the world shipping industry,” a Cosco media release said.
Industry watchers say the collaboration does not yet constitute a merger, though it could very well be an option.
The linkup comes after the two groups agreed in October 2012 to collaborate on domestic routes amid the global economic downturn, sparking speculations even then that a merger of the state-owned companies could be in the offing.
The carriers have been hit by massive debts and been ordered by the government to work more closely together before further funding is made available, according to local news reports.
Both companies are embarking on a fleet buildup after a very tough couple of years financially.
The signing ceremony was attended by Cosco group chairman Ma Zehua and president Li Yunpeng, and by China Shipping chairman Xu Lirong and president Zhang Guofa.