CULines ends participation in long-haul route

A container vessel of CULines (Source: CULines)

In the context of CULines having to cut services, according to consulting firm Linerlytica, its chairman and co-CEO Raymond Chen is said to be being detained in China for various undisclosed reasons, causing the company to be severely affected. The last time he appeared in public was in April 2023, at a roundtable event in the shipping industry held in Tianjin.

CULines is a state-owned enterprise, which entered the shipping market as an NVOCC before becoming a shipping company specializing in intra-Asia routes. During the boom of the market during the COVID-19 pandemic, CULines was one of the small firms that ventured into long-haul shipping routes, which is a playground for big carriers.

In March 2022, a year after launching Asia-North Europe connections with chartered ships and containers from Antong Holdings, CULines began rolling out the Asia-Mediterranean service with occasional frequency, connecting Chinese ports with Haifa (Israel), Ambarli (Turkey) and Piraeus (Greece).

In December last year, CULines withdrew from the Asia-North Europe service following a rapid drop in rates on the route amid falling demand and easing logistics congestion. The airline canceled the charter contract with Antong and had to pay $67 million in compensation. Half a year later, in June, CULines stopped participating in the transpacific service, the last trip being deployed with the 1,809 TEU Adamastos, also a vessel that CULines leased.

The last service of CULines running the Asia-Mediterranean route departed on July 15, when the Zhong Gu Nan Hai (capacity of 1,912 TEUs) left Ambarli port. After completing the trip, this ship is expected to be handed over to ship owner Zhonggu Logistics on August 15.

The complete withdrawal of CULines from long-haul sea routes has extinguished its ambition to list shares.

Previously in February 2022, CULines registered for an initial public offering on the Hong Kong Stock Exchange, it intends to use the proceeds to continue to develop its service network, towards to operate a fleet of 45 ships with a capacity of 160,000 TEUs by 2025. In November 2021, CULines also appointed Mr. Lars Christiansen, former Asia CEO of Hapag-Lloyd, to the position. co-CEO position, a move that comes as a huge surprise as it is unusual for a Chinese state-owned enterprise to place foreigners in senior positions.

However, instead of strong growth, the weakening shipping market has caused CULines to reduce its fleet capacity to 30,700 teu, 67% lower than the peak of 90,000 teu in 2022. The company has climbed from 95th on the world's largest shipping lines ranking to 22nd in March 2022, but has now dropped to 36th.

CULines is currently building six new ships with a total capacity of 24,200 teu, including two with a capacity of 7,000 TEU, expected to be delivered in 2023 and 2024. According to Linerlytica consulting, CULine has offered two 7,000 TEU vessels for sale.

Read more:

• SM Line is planning to acquire HMM for 3 billion USD
• Forecast of the container shipping market in the second half of 2023

Source: Phaata.com (According to The Loadstar)

Phaata - Vietnam's First International Logistics Marketplace

► Connect Shippers & Logistics Companies faster!