Merger Update: CSCL / COSCO

CSCL and COSCO have merged, following the integration and restructure of China COSCO, COSCO Pacific, China Shipping Container LINES (CSCL) and China Shipping Development. It’s a merger that will create an organisation that will be one of the world’s four largest container shipping lines.

The new entity will have a fleet of 288 container ships, of which 84 are larger than 8,000 TEUs and a total shipping capacity of approximately 1.6 TEUs.

As leaders in China’s shipping industry, COSCON and SCSL have cooperated for many years. The expectation is that the restructure and consolidation will yield a great improvement to the company’s core competitiveness. The merger will also offer employers a more diversified career development path.

For investors, the integration of quality resources and capture of synergies will bring a better return on investment. For customers, the expected shipping capacity and widened scope of the business will optimise the route network and improve the fleet structure. The end-goal for customers is an enhanced ability to deliver high-quality customer services and meet more rigorous services standards.

While the merger should further consolidate market share among shipping lines, the impact on shippers and consignees in Australia will be less capacity in the trade lane to China. Based on past experience, Australian business can also expect pricing competition to intensify post-merger.