COSCOCS says it will retain old alliances for now

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China’s biggest shipping  line, China Cosco Shipping (COSCOCS), plans to carry out a careful selection of its future  vessel-sharing alliance partners, but will maintain its two current  alliances for the moment, Reuters quoted the company as having said on Friday.

Analysts have said the global network of vessel-sharing alliances on  container routes could be shaken up by recent deals, including the  formation of COSCOCS through the merger of China Ocean Shipping (Group)  Company (COSCO) and China Shipping Group.

China COSCO, a unit of COSCO, is part of the CKYHE alliance with  Kawasaki Kisen Kaisha, Yang Ming Marine Transport, Hanjin Shipping and  Evergreen Marine, while China Shipping Container Lines , a unit of China Shipping Group, CMA CGM and United Arab Shipping Co make up the Ocean  Three alliance.

“The new group will choose its future partners carefully, and is  committed to building a strong and competitive alliance,” a spokeswoman  for COSCOCS reportedly said in an email to Reuters.

She added: “To ensure continued and stable services, the company will maintain  operations in the two alliances until the alliance reorganisation is  complete.”

These sorts of alliances were formed to combat a downturn in the  shipping industry, which has been battling overcapacity since the 2008  global financial crisis.

Tough business conditions forced operators to  look for ways to become more efficient.

In 2014, Chinese authorities blocked a deal between Maersk Line,  Mediterranean Shipping Co (MSC) and CMA CGM.

Maersk and MSC, the world’s two largest container liners by capacity, later formed their own  alliance.

COSCOCS’s launch also comes two months after CMA CGM proposed to buy Singapore’s Neptune Orient Lines for $2.4 billion.

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