Cosco Container Lines’ acquisition of China Shipping’s container ship fleet is expected to happen about March 1, Cosco said in a filing with the U.S. Federal Maritime Commission.
The date is in line with an earlier CSCL memo that said the companies’ assets would be combined early in 2016.
Cosco petitioned the FMC for permission to provide a universal notice to the commission and to customers that would avoid the need to file an amendment for each of the 700 China Shipping service contracts that Cosco will renumber and republish.
In addition to the universal notice, Cosco proposes to provide each shipper with an electronic notice of the change. Cosco also seeks a waiver to avoid amending each contract with the new tariff number, by publishing a notice of the change in the existing China Shipping and Cosco tariffs.
Following the merger of the container lines’ parent groups, Cosco and China Shipping signed an agreement in December under which China Shipping will charter all of its container ships to Cosco for a five-year-fixed term, with bilateral options later for vessels with capacities of at least 8,000 twenty-foot-equivalent units.
Once the complicated merger of the two state-owned carriers is completed, the CSCL division will cease to be a container carrier and will take on a ship leasing and financing role, leaving all the container transport to Cosco.
Earlier this month, China Shipping warned investors that it will have a 2015 net loss of $430 million amid record low freight rates and vessel impairment losses.
Contact Joseph Bonney at joseph.bonney@ihs.com and follow him on Twitter: @JosephBonney.
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