Cosco to Maintain Alliances despite Merger

China Cosco Shipping (COSCOCS) is to hold onto its current alliance structures until they expire, lessening fears of an immediate alliance restructure at an uncertain time for the industry, according to gCaptain.

Yu Zenggang, group spokesman for China Cosco did not specify the expiration date of the alliance agreements, yet it is believed to be in the close rather than distant future.

PTI’s previous report announced the merging of Cosco and China Shipping into a new entity entitled COSCOCS, with Cosco controlling the container shipping side to the new business.

Technical Paper: Unprecedented Challenges: Tackling the Biggest Alliances

Any new merger would bring complicated connotations due to the turbulent nature of the container shipping market, and would require both shipping lines to downsize in order to handle current challenges.

In a wider context, both carriers’ prospective alliances will eventually be affected. Cosco’s partners, which consist of K-Line, Yang Ming and Hanjin will likely be affected, as will China Shipping’s partner United Arab Shipping Company.

Another issue is CMA CGM and COSCOC’s newly proposed French-Asian alliance, which is set to acquire another three million TEU of capacity.