Business / Companies

Cosco helps trade route to Africa become well-traveled

By Zhong Nan (China Daily) Updated: 2014-03-11 08:57

Luo Renjian, a researcher at the Institute of Transportation Research under China's National Development and Reform Commission, said that as the world shipping market is in choppy waters, offering flexible services and cost-saving solutions to Chinese companies will help carriers find new market growth points.

Cosco Shipping has provided long-term services to China National Petroleum Co, China Machinery Engineering Co and Power Construction Corp of China to send goods and production materials as well as transport aid materials to Africa.

One of Cosco's biggest shipping assignments was transporting 400,000 metric tons of construction material and project equipment to Sudan for Africa's huge hydropower project, the Merowe Dam, from 2003 to 2008. Today, the structure provides water to 4 million people and facilitates Sudan's agricultural irrigation system.

Cosco helps trade route to Africa become well-traveled

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China-Africa trade moves up

With Africa entering a new round of development, many Chinese companies are now looking to participate in more societal projects.

"Although there are roads, dams, bridges, railway lines and various other government buildings that serve as testimony to Chinese capabilities, companies now are gearing up to participate in projects such as urban facilities, modern transportation and manufacturing," according to Han, the shipping company's general manager.

To rebalance its economic development model, China is adjusting its industrial structure and encouraging domestic companies to carry out projects such as power generation, high-speed rail, oil refining and other projects in emerging markets, especially in Africa and South America.

"This means that when it comes to buying and building things, they usually turn to China for inexpensive but reliable building materials, bulldozers, technical solutions and project contractors," Han said.

"The demand for specialized carriers and multipurpose vessel transport has become an indispensable part of the 'going global' strategy supported by a large number of Chinese companies," he said.

Cosco organizes its vessels based on the amount of goods shipped in a bid to optimize capacity. If necessary, the company also will charter vessels from other companies to meet customers' needs.

In comparison with China, most African ports and harbors are relatively undeveloped and short of proper vessel yards. Bureaucracy and infrastructure issues make it difficult for many Chinese companies to carry out construction projects in Africa.

Cosco helps trade route to Africa become well-traveled

In view of these problems, Cosco Shipping is building a good relationship with port authorities, local agencies and companies to coordinate timely pickups.

"Being supported by capable local partners not only will accelerate customs clearance, it can also help us to discharge cargos quickly by using their cranes, trucks and workers," Han said. "In the meantime, their employees also are working with us to monitor goods and containers unloaded from ships to ensure freight quality."

Eager to build sustainable trade relations with its African counterparts, China has reduced timber imports from such African countries as Gabon, Cameroon and Republic of Congo, where illegal logging has become rampant in recent years, and has provided funds to help certain countries to crack down on the illegal timber trade.

"Cosco Shipping is taking illegal timber seriously," Han said. "We need to make sure our African clients have authentic documents before shipping the timber. The authorities are called when needed to halt possible illegal activities."

Although the amount of African timber imported to China has declined in recent years, Cosco Shipping's work ethics are helping to win popularity with local communities and clients.

Han said its market share is gradually increasing, along with the trust of local timber businessmen. The company's market share for timber ocean transportation reached 60 percent in Cameroon, Equatorial Guinea, Republic of Congo and the Democratic Republic of Congo in 2013.