CHINA'S MARITIME PRESENCE

Much has been said within the industry and the media about the rapid growth of China Shipping Group and the company's prediction that China Shipping Container Lines will rank in the top five carriers by capacity before long. But the carrier is just one of China's major shipping lines. The industry should not forget the strength of China Ocean Shipping Co. And Sinotrans, which may not have the scale of its brethren, also offers a creditable service portfolio.

Fittingly, this week marks the 10th anniversary of Sinotrans' service in Britain on the China-Europe trade. Today it operates three ships in a nine-ship service with Hanjin Shipping Co. of South Korea.Sinotrans is primarily a forwarding organization that is also involved in warehousing, logistics and overland transportation. In fact, Sinotrans' maritime interests -- particularly its container shipping business on deep-sea routes -- were buried in the company's overall structure until 1998, when it formed Sinotrans Container Lines Ltd.

The expansion marked Sinotrans' first step into a competitive situation. Some may argue that the company is still financed by Beijing, but sources say little of that goes on today. Indeed, Sinotrans is a stand-alone organization that must prove it can succeed. So far, it has.

But all is not well for the company. Sinotrans in the mid-1990s acquired its first six ships, so-called Econships (not to be confused with the 4,400-TEU vessels that United States Lines built in the early 1980s for its unsuccessful round-the world service.) While Sinotrans' ships may have been cheap, their 2,200-TEU size and relatively slow speeds limited the company's ability to grow as trade between China and Europe surged.

Today at least three of those ships have been chartered to Mediterranean Shipping Co., though likely at rock-bottom rates.

On the upside, however, Sinotrans has responded to the surge in China's trade by chartering three new 4,000-TEU vessels for two years from Germany's Hansa Mare. Those vessels were delivered in January and February, and are now in use. 'The better deadweight-TEU utilization potential and service speed of these ships means less headache for the marketing people and customer services,' a senior Sinotrans official said. 'I don't like to admit we left cargo behind because of space restrictions on the smaller ships, but they certainly were not suitable for a trade like China-Europe.'

Sinotrans also serves the trans-Pacific through slot-charter arrangements with Hanjin, and may deploy its own ships on the trade.

Meanwhile, Cosco needs little introduction to the shipping world. Ranked third in the world with 210,000 TEUs of capacity and more than 120 container ships, Cosco has garnered respect worldwide.

Perhaps the best way to describe Cosco is by highlighting the ships it has on order. The company is building nearly $500 million worth of post-Panamax capacity in Japan and China. Seven 5,600-TEU container ships -- the largest ever owned by Cosco, and the largest ever built in China -- will enter service this year on the China-Europe route. Those ships will replace vessels of around 3,500-TEU capacity. It is unclear whether the displaced ships will be redeployed.

Cosco has built up its own agency network through Europe, and has extended its Mediterranean coverage throughout the region. The carrier soon will serve ports in the Black Sea by feeder networks and will expand its connections through Africa.

The shipbuilding program involves a joint venture with Japan's Kawasaki Heavy Industries. Two of the seven ships are being built at Nantong, with Japanese technical expertise.

Paul Richardson can be reached at 011-44-208-942-1993 or xdd80@dial.pipex.com. Richardson is the editor of PR News Service, an e-mail news service covering container shipping.

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