Chinese players lead in liner growth story
|Four of the seven new entrants into Sea-Intelligence’s list of the world’s 50 largest liner operators are from China, as they rode on soaring freight rates to break into long-haul routes and expand their fleets.
Leading the upstarts is China United Lines (CULines), which was not even in the top 100 at the outset of the pandemic in 2020, but now has a capacity of 82,000 TEU and is the world’s 24th largest carrier.
Sea-Intelligence CEO Alan Murphy said, “They (CULines) are one of the very clear beneficiaries of the extremely strong container market of 2020-22.”
In 2021, CULines, originally focused on intra-Asia routes, launched Asia-Europe and Transpacific services.
In November 2021, the company appointed former Hapag-Lloyd senior executive Lars Christiansen as its co-CEO, in a move unusual for a state-controlled firm. CULines has also applied to be listed on the Hong Kong Stock Exchange to raise funds for future expansion.
With nine ships ranging from 1,900 to 7,000 TEU on order, CULines is now trialing Asia-Mediterranean services.
BAL Container Line, a privately owned Chinese carrier, has also gained from the extremely strong market conditions. Like CULines, BAL was focused on intra-Asia routes before starting Transpacific and Asia-Europe services in mid-2021.
Murphy noted that BAL was also outside the top 100 at the outset of the pandemic, but now operates 22,000 TEU and is the 44th largest carrier. However, BAL’s current fleet has fallen by 11,000 TEU since November 2021. The company is poised for expansion, having ordered two 14,000 TEU ships at Jiangnan Shipyard on 21 June, for delivery in 2024.
Transfar Shipping, in which Chinese e-commerce giant Alibaba is a minor shareholder, is also a newcomer after the former NVOCC began China-US West Coast liner services in August 2021 and China-US East Coast sailings in February this year. Transfar now operates a chartered fleet of 21,500 TEU, making it the 45th largest carrier.
Murphy commented, “The large global carriers have remained fairly steady in their fleet sizes, whereas the smaller carriers have seen highly significant changes during the pandemic period. The vast majority of carriers have seen the charter ratio of their fleet decline (from 56% in January 2020 to 48% in June 2022). This is most likely a clear reflection of the tight container market, leading carriers to attempt to get more control of their vessel fleet, in a market where the charter rates remain downright astronomical.”