China Ocean Shipping Co (Group) Company (COSCO) is looking to expand its shipping capacity on the China-US line this year.

The plan intends to increase the country's largest shipping company's competitiveness on this line, given the background that the recently-signed China-US Maritime Agreement relaxing controls on Chinese liners, according to a COSCO Container Lines spokesman.

The spokesman said the company will replace its 5,600 TEUs (20-feet equivalent units) vessels with larger ships with 7,500 TEUs.

"The first five will begin working later this year, and the rest will gradually come into operation," he said.

COSCO now has 20 container vessels on the line between China and the United States.

COSCO's annual shipments reached 1 million TEUs last year, which accounts for half of COSCO's annual operation.

"The move by COSCO is to enhance its standing on the Pacific line, especially the line between China and United States, which is the key battlefield between the world's major liners,"the spokesman said.

Use of larger container vessels is the trend of shipping industry, which can help reduce costs.

COSCO is now one the leading firms. The world's largest liner Maersk tops the market.

A report from the Britain Drewry Shipping Consultants, said the global container trade has increased by 2.5 and 3 times the rate of GDP growth. The report attributed it to the rapid growth in China's foreign trade as demand for cargo space is so strong and rates for chartering container ships have also shot up.

The China-US Maritime Agreement is another factor behind the increased capacity, according to the spokesman.

"The Agreement gives Chinese shipping companies a level playing field with foreign liners," he said.

The China-US Maritime Agreement was signed in December during Chinese Premier Wen Jiabao's visit. The previous one expired in September 1998.

The lack of the Agreement created many limits to the operation of Chinese shipping companies, the spokesman said.

For example, Chinese liners have to submit a report one month before their price changes.

"It makes us slow in a market full of fluctuations," he said.

He said COSCO can not afford to miss the opportunity offered by increasing Sino-US trade.

Sino-US trade rose by nearly 30 per cent to US$113.7 billion in the first 11 months.

The maritime industry is a major vehicle for the prospering trade ties.

In his trip to United States last month, Premier Wen also visited Conley Terminal of Boston Port where COSCO ships are berthed.

COSCO has brought thousands more containers with valuable products to the port and has helped keep 9,000 people working in Massachusetts maritime industries, the spokesman said.

Besides capacity expansion, COSCO is moving to buy more terminals in United States.

COSCO will work with PSA Corp for terminals on the US East Coast.

PSA and COSCO just inaugurated their first joint venture terminal, the US$94.34 million COSCO-PSA Terminal, in Singapore.

On the locations being considered for COSCO-PSA ventures worldwide, Wei Jiafu, COSCO president said they would choose hub ports in the Mediterranean and US east coast.

COSCO Pacific, a unit of COSCO, plans to spend US$350 million over the next 12 months to buy ports in China and the United States.

"Long Beach container port in the United States is in the list", the firm's management has told analysts.

Close

Today's Top News		Top Business News
+Taiwan stops playing with fire ( 2004-01-07) +Task force to oversee political progress ( 2004-01-07) +Nation puts lid on cost of basic utilities ( 2004-01-07) +No symptoms from 2nd suspected case ( 2004-01-07) +Experts urge business income tax unification ( 2004-01-08)		+Revamping energy supply system ( 2004-01-08) +Pre-emptive rights to be used on Mitsui ( 2004-01-08) +China Green IPO gets positive response ( 2004-01-08) +Bank support scheme backed ( 2004-01-08) +COSCO to enhance Pacific line ( 2004-01-08)