Keep Watching in Cold Winter in 2014

Reporter Xu Hua

Cooperation

Container shipping has never lacked genes of alliance,routes, container n e t w o r k, a n d t h e complementarity of ship can greatly enhance the competitiveness of the league. In June 2013, Maersk, Mediterranean shipping (MSC) and CGM announced to build P3 network alliance, opening the great age of alliance. The top 20 container shipping companies in the world have either joined alliance, or are on the way to join the alliance.

In the first half of 2014, Evergreen Marine Corp. who had never participated in any league, joined CKYH alliance, and formed CKYHE alliance; With the joining of China Shipping Container Lines and the United Arabian Shipping Company, the alliance was renamed as A7 alliance. Also in the first half of 2014, the container transport sector of CSAV South American merged with Hapag-Lloyd. It is originally believed that the three super alliances of P3, A7, G6 will finally put an end to the great show of alliance in container shipping.

However in less than a month, on June 17, following a veto on P3 by China's Ministry of Commerce, the two biggest global companies in container shipping industry,Maersk Line and the Mediterranean Sea shipping (MSC),announced on July 10 to launch a new 10-year ship sharing agreement, named as “2M”, covering 185 ships,21 routes, and a total capacity of about 2.1 million TEU.The alliance will definitely replace M&A to be the main way for industry consolidation.

Game

The continuing fall of oil price has startled the international community. But the fallen oil price has given the shipping industry a respite, the cost of fuel which accounts for 50% of the total cost has been greatly reduced, and the oil transportation market which had been suffering for years has also reverted its downward situation, with oil shipping rates rising all the way. In December alone, 80 oil tankers have rushed to China from all oil production fields in the world,and what came next is the main ship yards in the world seeing orders “blossom and bear fruit”. The situation is good for everyone except for Nan Jing Tanker Cooperation, for whom, the spring has come too late. In spite of saying “goodbye” to A-share market, the market has never reduced its attention on Nan Jing Tanker Cooperation under the background of lots of able people rushing to raise bet before delisting. As a key link of“rebirth”, the reorganization plan of the company was released on December 2. It intends to pay off billions of debts by way of cash and “debt-to-equity swap”, so that the company can feel relieved. It is worth mentioning that Nan Jing Tanker Cooperation after reorganization is not seeking remold by way of external force, the focus of its future business will still take shipping as its center.

Development

During the past year, the development has been always promoted in new measures. On December 24, the State Council Premier Li Keqiang presided over a state council executive meeting, planning to increase financial support for enterprises to "go out" to promote industrial upgrade. Li said that China today has come to a new stage: China should be upgraded from being the “world factory” producing consumer goods in the past to be the important base providing advanced equipment to the world. Chinese enterprises and products should be put under the test of the highest level in the international market and be promoted in terms of quality and efficiency in the process of fierce competition.

In 2014, China's maritime and waterway transportation has received unprecedented attention and development.The central work meeting on economy this year put forward the focus of implementing three strategies of “one belt and one road”, coordinated development of Beijing-Tianjin-Hebei region, the Yangtze River economic belt. The “One belt and one road”, referred to as “China's Marshall plan” is an important measure for a new power to establish new peripheral relations, and has important strategic significance on realization of the Chinese dream of revitalizing the Chinese nation.

By way of large output of surplus capacity, the American Marshall plan has not only made Europe recover within 4 years to reach where it was prior to the second world war, but also taken American economy to more than ten years' prosperity from the bottom. Japan has also realized industry upgrade through outputting the production capacity of the outdated and surplus industry. The “one belt and one road” and the Yangtze river economic belt will play an essential role for the economic development of the Yangtze river area, and as a policy of making the nation and the people rich and prosperous by relying on sea and rivers, this policy will promote the rapid development of the national shipping and the upstream and downstream industry chain.