Your round-up of the latest Asia container shipping news looks at launch problems for the Japanese, new service from a Taiwanese line and thwarted Chinese ambitions to build the world’s biggest container grouping.
ONE launch suffers a glitch
The metamorphism of the three leading Japanese container shipping lines, NYK, MOL and K Line, as the Ocean Network Express on April 1, quickly ran into difficulties with their booking systems.
A spokesperson for the Singapore-based shipping line said the start up of ONE was “going to plan,” although there were some delays transferring staff and it will take a number of weeks to complete the process.
Reports of difficulties in booking cargo quickly followed the launch, with one user calling the booking process “a disaster,” adding that ONE staff members were not returning phone calls or emails.
The ONE spokesperson said that the booking delays were temporary teething issues.
The carrier is part of THE Alliance with members Hapag-Lloyd and Yang Ming.
ONE has the world’s sixth-largest fleet that, according to Alphaliner data, with a capacity of 1.48 million TEU.
Southeast Asia service enhancement
In good news for regular shippers from the region, Yang Ming are deploying two container ships of 2,800TEU from 20th April 2018, calling at Port Kelang – Singapore – Jakarta – Surabaya – Panjang – Jakarta – Port Kelang with a round voyage of 14 days.
Yang Ming also provides China-To-Indonesia and Taiwan-Hong Kong- Indonesia services covering China, Taiwan, Hong Kong, and Shekou to Jakarta, Surabaya and Semarang.
COSCO ambitions threatened
COSCO’s planned takeover of rival container shipping line OOCL, could be derailed by a perceived threat to US national security interests.
According to a report by Alphaliner, the main issue is OOCL’s property at Long Beach Container Terminal, which would pass to the Chinese in the deal.
COSCO already has controlling interests at two terminals in the Los Angeles-Long Beach San Pedro Bay port complex. There is “anxiety over worsening Sino-US trade ties and the Trump administration’s efforts to curtail Chinese investments in the US”.
The Committee on Foreign Investment in the US (CFIUS), which acquired new powers giving the president the authority to stop a foreign deal that ‘threatens to impair the national security’, is still questioning COSCO executives.
STOP PRESS 24.45.18 – The Wall Street Journal is reporting that COSCO Shipping is considering selling OOCL’s terminal in Long Beach in order to clear the ocean liner deal.
COSCO Shipping was expecting to acquire 90.1% of OOCL’s shares and complete the deal by 30 June.
Shares in OOCL’s controlling company Orient Overseas International Lines (OOIL) are currently trading at a 12% discount on COSCO’s offer price, “with investors increasingly concerned that the deal could be blocked by US regulators”.
Terms stipulate the transaction must be completed by 30 June, or OOIL will receive a break fee of $253m, although The Loadstar report sources that state the fee could be waived if the transaction does not meet the requirements of the CFIUS.
There are rumours that French group, CMA CGM may enter the fray and French owners may appeal to the US. However, it is unlikely that CMA CGM would be prepared to match the COSCO offer and there is no indication that OOIL would consider discounting.
Anti-competition authorities in the US and EU have already approved the COSCO deal, but the Chinese regulator MOFCOM has yet to indicate.