China's Top Two Shippers Unite in Domestic Container Trade

China Shipping Container Lines Co Ltd (CSCL) and COSCO Container Lines Co Ltd agreed to mutually operate trade routes from north and northeast China to Fujian and Shantou in the southern area of Guangdong from mid-October.

With a shared market share of 80 percent in the domestic coastal container trade, the two shippers would each arrange ships to jointly operate the routes.

According to CSCL, the move is only the beginning of an intensive cooperation in domestic container shipping between both companies.

Global container freight rates have been beaten by a slow global economy last year, but rates have bounced back in the second quarter on rising U.S. demand and shipping firms’ determination to slash excessive capacity.

Shares of both CSCL and China COSCO have outdone the broader market in the past five weeks and were almost 30 percent from their year low in September.

Shares in China COSCA, which also controls the world’s largest dry bulk cargo fleet, are still down around 6 percent so far this year. CSCL’s stock has been flat.