Chinese Shipping Company in the Market for $1.5 Billion Worth of Ships – Specialised Advice by CWIIL Group

China Shipping Container Lines Co. (CSCL) – a subsidiary of China Shipping Group Co. – is seeking to buy 10 ultra-large ships for $1.5 billion, reports the Wall Street Journal. The ships can carry up to 20,000 intermodal containers each, and will help the company to fulfill capacity commitments for its Ocean Three Alliance, a three-way agreement between CSCL, France’s CMA CGM SA, and the UAE’s United Arab Shipping Co. aimed at boosting operational efficiency.

Shipyards Dalian Shipbuilding Industry Co., Shanghai Waigaoqiao Shipbuilding Co., and Hudong-Zhonghua Shipbuilding Group Co. are potential candidates for the contract, which will be announced at the end of this year. The ships are expected to be delivered in 2018 or 2019.

The ships acquired from the contract will also add to a more than 30 percent excess gap in the water between Asia and Europe, which is causing freight rates to fall drastically. The economic slowdown in Asia (China in particular) is also contributing to a 10 percent drop in goods shipped between the two continents. Imports in European luxury items have decreased by as much as 17 percent since the mid-August devaluation of the Chinese yuan.

Still, if CSCL wants to vie against its competitors it will have to increase its own capacity, says Jonathan Roach, a container shipping analyst with Braemar ACM Shipbroking. The ultra-large ships won’t only increase the company’s capacity, but make it up to 25 percent cheaper to ship a container of an ultra large carrier compared to an older, smaller ship.

Last week CSCL reported a 97 percent drop in the first half of 2015 since the same time last year due to declining freight rates. The company’s total profits so far this year amount to $1.7 million. The company has increased its capacity by 182,000 containers in the first half of 2015 to its current total of 908,579.

These materials are not intended and should not be used as legal advice or other recommendation. If you need a legal opinion on a specific issue or factual situation, please contact a lawyer. Anyone using these materials should not rely on them as a substitute for legal advice.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advise and approach is unique with CWIIL Group and is based on the overall Management Philosophy of all CWIIL Group Companies.

Consulting CWIIL Group of Companies, for any / all investment matters ensures advice based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessing of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and unknowledgeable investment advice can be disastrous and thus should be avoided.

CWIIL Group of Companies is a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. CWIIL Group of Companies Products, Services, Project and Solutions are in a multitude of Verticals including, but not limited to, Infrastructure, Power, Oil & Gas, Legal, Media, Technology, ITES, HR, Shipping, Aviation, Real Estate, Hospitals, Health and Medicine, Education, Funding & Investment, Business and Legal Consultancy, and Public Private Partnerships, and other CWIIL Group Units, worldwide, to name a few.

For Further Queries Feel Free to Contact :

For Queries Specific to China :
Email: china@cwiilgroup.com , hq@cwiilgroup.eu
Web: www.cwiilgroup.com , www.cwiilgroup.eu

For Any / All Other Queries :
CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
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