CHINA SHIPPING GROUP MAY BE SHIFTING COURSE

CHINA SHIPPING GROUP MAY BE SHIFTING COURSE

China Shipping Group (CSG) continues its expansion, but there could be changes of thinking within.

The company will need little introduction to readers of this column.Suffice to say that CSG has stunned shipping circles with a series of trade and service expansions over the last year, leaving management confident that - if everything goes to plan - the group will be in the top five container-shipping-line league within the next few years.

CSG, or China Shipping Container Line, as it known in the box business, has always moved ahead as a stand-alone carrier. There have been no alliances to speak off, and none of the vessel- or slot-sharing agreements that have become commonplace in the industry.

What has been achieved has come courtesy of a series of one-line services on the Asia-Europe, Asia-Mediterranean and trans-Pacific trade lanes.

Agency setups in Europe, Asia and the United States have provided a strong marketing and customer-service resource, linked with some of the best in the business.

There are Norton Lilly in the United States, Johnson, Stevens in Britain, and Peter Lampke in Germany, to name a few - all names that need no introduction. Importantly, they are working with CSG under joint-venture organizations instigated by Shanghai and accomplished with one aim in mind.

That objective, simply, is to make CSG a leading name, and to accomplish that without wreaking havoc with overcapacity, and without sending the shipping business into a downward spin of rate depression.

Programs to build new ships have been initiated via Seaspan Shipbrokers in Vancouver, which is closely affiliated with CSG. Ten new post-Panamax vessels will be built in China. More ships of both post-Panamax and Panamax design will be built in Korea for charter to CSG.

There's not a lot of straying there from the stand-alone stance.

But things are changing. That ''we don't need anyone apart from those we work with'' approach is beginning to fade.

That may be because of some long-term plan that initially saw CSG accomplish itself in the marketplace through its own joint ventures on one side, then called for it to move into partnerships on the seagoing side with the stalwarts who had already cut their teeth on a trade.

But it also could be because there are a few greenhorns in Shanghai who really believed it would all work without just a little bit of help from a friend or two.

And there's also the possibility that there are some really clever guys out there who pre-empted this lot, and, when the ''help'' signs came out of Shanghai, felt this would be an easy game to get into a trade lane or two. Personally, I think that's a bit harsh.

I am a cynic, but not that much of one. I reckon CSG has bitten off more than it can chew, and I suspect that some lines are seeing Shanghai's direction as offering an ideal opportunity to develop their own markets. Well, that's business, and good luck to them.

In the last week, CSG has confirmed it is to start a new vessel-sharing agreement on the trans-Pacific trades with Zim Israel Navigation Co.

On the Asia-Europe and Asia-Mediterranean trades, CSG is joining up with French line, Compagnie Maritime d'Affretement (CMA).

Separately, on an entirely new service, CSG and CMA will offer customers a joint service with nine ships on the all-water route between Asia and the U.S. East Coast through the Panama Canal.

All are starting up in April.

CMA Chairman Rodolphe Saade had said last autumn his company was looking to initiate the all-water service by the second quarter of this year. So that one wasn't a surprise from the French side.

The more important aspect here is that CMA and the Taiwan line Kien Hung were going for this one some months ago. Now it seems that Kien Hung had some trouble chartering the necessary ships for the service, and CSG has stepped in its place as a vessel provider.

A little more could be read into this one. Kien Hung is Taiwanese, and the main focus on the all-water service is China. Perhaps Beijing wasn't too keen on the newcomer from across the straits.

Cynical? Me? Sure.

If you want my views, China Shipping Group is here to stay, and the Chinese don't like losing face. Whatever the reasons for these happenings, the only concern the rest of the industry should have is simply this: When the going gets tough, the tough get going.